Money Back Policy

Money Back Policy

Did you know? According to the IRDAI annual report, out of 100 life insurance policies sold, only 30-40 will complete their tenure. Yes, you heard it right. The most common reason for surrendering a policy is the inability to fulfill it financially.

So, what if we tell you that some policies start paying you right after the end of the premium payment term? In this article, we will discuss money-back plans and why these plans are quite popular nowadays.

What is a Money Back Policy?

Money-back policies are a type of insurance plan that offers comprehensive benefits of regular payouts along with guaranteed death and maturity benefits. The regular payout is a pre-determined proportion of your sum assured that is paid at regular intervals during the policy tenure.

The regular payout can be utilized for various purposes such as education, marriage, purchasing a house, or completing other financial goals.

Plans such as ICICI Prudential Guaranteed Income for Tomorrow, Bajaj Allianz Life Assured Wealth Goal, Tata AIA Guarantee Return Insurance Plan, Bharti AXA Guaranteed Wealth Pro, and Edelweiss Tokio Life Guaranteed Growth Plan offer Money Back Plans.

Best Money Back Plans in India

Here is a list of the best Money Back Plans in India:

How Does a Money Back Plan Work?

As the name suggests, Money Back Plans are a type of life insurance plan that offers a pre-determined regular payout from the sum assured at specific policy intervals.

Real Case Scenario

Mr. Vishal Sharma, a 30-year-old private employee, bought a 30-year money-back policy with a sum assured of Rs. 1 Crore. The money-back plan offers Mr. Vishal 15% survival benefits every five years, starting from its inception.

Now, Mr. Vishal will receive an amount equal to Rs. 15 Lakh at every fifth, tenth, fifteenth, and twentieth year, and so on. Along with an amount of Rs. 10 Lakh plus any bonuses at maturity.

In case of the unfortunate death of Mr. Vishal during the 15th policy year, the plan will pay an amount of Rs. 70 Lakh to the nominee.

Why Should You Choose Money Back Plans?

Money-back plans are designed to offer a steady source of income. Unlike stocks and mutual funds, these plans are not dependent on market performance. Hence, you can rely on them to receive regular guaranteed income for the whole policy tenure.

Here are some unique features of Money Back Plans:

• Guaranteed Returns

  It offers guaranteed returns regardless of market fluctuations.

• Life Coverage

  It offers life insurance coverage for the entire policy term. In case of any unfortunate event, the death benefit equal to the sum assured is paid to the nominee.

• Bonus and Additions

  These policies offer bonuses at regular intervals as per the insurer's performance. The bonus will be automatically added to the sum assured and paid at maturity.

• Flexibility

  These plans offer flexibility to choose from various premium payment and policy terms. You can choose any specific option that fulfills your requirements.

• Regular Payout

  Money-back plans offer a regular payout to the policyholder at pre-determined life stages. The payout will be paid from the sum assured chosen at the time of policy purchase.

Fixed Deposits vs. Money Back Life Insurance: A Quick Comparison

What are the Eligibility Criteria to Purchase a Money Back Plan?

To purchase a money-back plan, one should fulfill the below parameters:

• The minimum age of the customer must be 18 years, and the maximum goes up to 55-65 years.
• The customer must have a stable source of income to avoid missing premium due dates.
• Money-back plans offer policy terms from 10-25 years; it cannot go beyond the permitted age.

Money Back Plan Benefits

Here are the benefits of Money Back Plans:

• It offers the dual benefit of investment and insurance.
• It pays a guaranteed income payout during the whole policy tenure.
• It offers tax benefits under sections 80C and 10(10D) of the Income Tax Act 1961.
• Apart from regular payouts, these plans also offer maturity benefits.

List of Riders Available in Money Back Plans

Following is the list of riders available in Money Back Plans:

1. Waiver of Premium

   In case of any unforeseen event in which the life insured is diagnosed with partial disability, all future premiums of the plan will be waived.

2. Accidental Death Benefit Rider

   In case of any unforeseen event in which the life insured loses their life, a rider sum assured will be paid to the nominee along with the plan sum assured.

3. Terminal Illness Rider

   This rider will pay a cash benefit to the nominee in case of a diagnosis of any terminal illness during the policy term.

4. Critical Illness Rider

   This rider will pay the rider sum assured upon diagnosis with any of the critical illnesses during the policy term.

5. Accelerated Sum Assured

   This rider will provide a portion of the sum assured in case he/she is diagnosed with any critical disease during the policy tenure.

How to Purchase a Money Back Plan?

Here are the steps to purchase a Money Back Plan from an insurer:

1. Visit the official website of the insurer.
2. Select Money Back Plan from their main page.
3. Compare different plans as per premium, coverage, and benefits.
4. Choose a plan that suits your needs.
5. Fill in all mandatory details and make payment.
6. Review the policy document.

Documents Required to Purchase Money Back Plans

Following is the list of documents required to purchase Money Back Plans:

Age Proof (Anyone)

• Aadhar card
• PAN card
• Voter ID card
• Passport

Address Proof (Anyone)

• Aadhar card
• PAN card
• Voter ID card
• Passport

Income Proof (Anyone)

• Bank statement
• Salary slips
• Passbook

Final Words

Money-back plans are always considered the best investment if you are looking for a steady income during the whole policy tenure. This plan provides comprehensive benefits of investment and insurance.

For any queries related to money-back plans, you can directly contact PolicyX.com. Our trusted financial advisors will solve every possible query and suggest the best money-back plan.