Money Back Policy

Money Back Policy
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  • Tax Benefits
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Money Back Policy

Money Back Policy is meant to provide life cover to secure your family from financial requirements during critical illness and death of the life insured. A traditional life insurance plan is proven less beneficial when it comes to fulfilling liquidity needs. A money back policy helps in providing liquidity facility and pays out a percentage of the Sum Assured amount consistently at the time of policy tenure. Also, the maturity benefit is paid at intervals in the form of survival benefit periodically. This resolves the problem of financial needs in the major phases of life.

An ideal money back plan is worthy for you and your family if you are searching for guaranteed returns on your investments and regular payments along with life coverage simultaneously. The plans offer death benefit on the death of the policyholder and on surviving till the end of the policy term, it will pay survival benefit in addition to any applicable bonuses. In the event of the death of the policyholder during the policy term, the nominee will be paid the whole Sum Assured amount regardless of the survival benefit. The money back plans are participating in which bonuses are paid as per the company's performance. Various riders are also available under the money back plans whose benefits are paid in a lump sum only if emergencies exist at the time of policy tenure.

Now, let us have a look at some popular Money Back Plans available in India.

Money Back Plans in India 2020

1. LIC Money Back Policy- 20 Years

LIC Money Back Policy- 20 Years is a non-linked participating plan that offers a unique combination by paying a survival benefit at regular intervals during the policy tenure and security against death across the term of the plan. This acts as a support for the policyholder's family in case of any unfortunate mishap happened with the latter.

Benefits of LIC Money Back Policy- 20 Years:

  • The death benefit is paid as 'Sum Assured on Death' along with the vested Simple Reversionary Bonuses and any applicable Final Additional Bonus.
  • The death benefit is not less than 105% of all the paid premiums, till death.
  • This plan will pay 20% of the Basic Sum Assured if the policyholder survives till the end of 5th, 10th and 15th policy years.
  • On surviving the maturity date, 40% of the Basic Sum Assured will be paid in addition to any bonuses (if applicable).
  • The plan is participating and so shall be responsible to pay any declared reversionary bonuses and final bonus.

Eligibility Criteria:-

Age at Entry13-50 years (nearest birthday)
Age at Maturity (Maximum)70 years (nearest birthday)
Sum AssuredRs. 1 lakh (minimum)
Policy Tenure20 years
Premium Paying Term (PPT)15 years

2. SBI Life Smart Money Back Gold

SBI Life Smart Money Back Gold is a participating non-linked individual life insurance plan which provides the dual benefit of regular income and life coverage to meet the life insured's financial plans and goals. Hence, provides security for the family's future.

Benefits of SBI Life Smart Money Back Gold:

  • It offers flexibility in choosing the money back plan from 3 available options.
  • 110% of the basic sum assured will be paid as survival benefit.
  • On choosing a large sum assured at the inception of the policy, one can avail exclusive premium discounts.
  • Liquidity facilities are also offered under the plan.
  • The policyholder can select premium paying terms as per convenience.

Eligibility Criteria:-

Age at Entry14-45 years
Age at Maturity (Maximum)70 years
Policy Tenure15, 20, 25 years
Premium Paying Term (PPT)Regular Premium Options:
8 years (15-year policy term)
10 years (20-year policy term)
12 years (25-year policy term)
Limited Premium Options:
8 years (15-year policy term)
10 years (20-year policy term)
12 years (25-year policy term)
Sum AssuredRs. 2 lakh (minimum; in multiples of Rs. 1000)

3. HDFC Life Super Income Plan

HDFC Life Super Income Plan is a limited pay & participating non-linked money back life insurance plan. The plan offers guaranteed benefits including bonuses to best suit your investment necessities. This money back policy pays a regular income to set you and your family free from future uncertainties.

Benefits of HDFC Life Super Income Plan:

  • It provides a guaranteed income for 8 to 15 years after completion of the premium paying term.
  • One can choose from different premium paying terms and policy terms available.
  • Helps in enhancing income at the time of maturity by adding reversionary and terminal bonuses.
  • Availability of Short Medical Questionnaire (SMQ) based underwriting for easy issuance of the policy.
  • Enjoy the benefit of life coverage throughout the policy tenure.

Eligibility Criteria:-

Age at Entry30 days-59 years (age at last birthday)
Age at Maturity (Maximum)18-75 years
Policy Tenure16-27 years
Sum AssuredRs. 1 lakh (minimum)

4. Reliance Guaranteed Money Back Plan

Reliance Guaranteed Money Back Plan is a non-participating, non-linked and non-variable money back insurance plan that helps you save at periodic intervals and enhance your savings continuously for a secure future of your family even when you will not be available to take care of them.

Benefits of Reliance Guaranteed Money Back Plan:

  • The plan offers savings in the form of returns, loyalty additions, and maturity addition as well.
  • Life coverage up to 10 times of the annual premiums for the full policy tenure.
  • In the event of accidental death, an additional life cover is provided equivalent to Sum Assured.
  • Also, in case of accidental death, all the future premiums are waived off.
  • Avail tax benefits under the income tax laws of India on investment with returns.
  • Options to choose the policy tenure and a premium payment term.

Eligibility Criteria:-

Age at Entry18-58 years (age at last birthday)
Age at Maturity (Maximum)75 years
Policy Tenure15, 20 years
Premium Paying Term (PPT)15 years
Premium Paying Frequency Yearly, Half-yearly, Quarterly and Monthly

5. Kotak Premier Money Back Plan

Kotak Premier Money Back Plan is a savings plus life insurance limited pay plan which provides lump-sum payouts at equal intervals to fulfil your financial needs along with the full life cover.

Benefits of Kotak Premier Money Back Plan:

  • Pays a maturity benefit on surviving the policy tenure.
  • The additional accidental death benefit is payable in the event of death due to an accident.
  • Regular money back returns as per the chosen policy tenure.
  • After completion of 1 year, the policyholder is eligible to receive additional bonuses.

Eligibility Criteria:-

Age at Entry2-57 years (age at last birthday)
Age at Maturity (Maximum)75 years
Policy Tenure16, 20, 24 years
Premium Paying Term (PPT)8 years (16-year term),
10 years (20-year term),
12 years (24-year term)
Premium Paying ModeYearly, Half-yearly, Quarterly, Monthly
Sum AssuredRs. 1.5 lakhs (minimum)

6. PNB Metlife Money Back Plan

PNB Metlife Money Back Plan is a non-participating & non-linked endowment life insurance plan which is a blend of guaranteed income together with protection for life during uncertainties. This plan is ideal for wealth accumulation to secure the future of the family.

Benefits of PNB Metlife Money Back Plan:

  • It offers 10% Sum Assured from 5th to 9th policy year as regular survival benefits.
  • 60% lump sum is paid to the policyholder at the time of maturity.
  • The death benefit in addition to any accrued bonus, if any will be payable in case of an unfortunate demise of the policyholder.
  • Income tax benefits are applicable under the Income Tax Act of India, 1961.

Eligibility Criteria:-

Age at Entry13-55 years
Age at Maturity (Maximum)65 years
Policy Tenure10 years
Premium Paying FrequencyAnnual, Semi-annual
Sum Assured (Minimum)Rs. 2.5 lakhs

7. ICICI Pru Cash Advantage

ICICI Pru Cash Advantage Plan is designed as a savings cum protection life insurance plan that offers guaranteed returns and also, fulfils the liquidity needs of the customer.

Benefits of ICICI Pru Cash Advantage Plan:

  • The plan provides liquidity facilities to the life insured.
  • It offers guaranteed maturity benefit after the policy tenure.
  • It provides life coverage for the entire policy term.
  • Flexibility to choose premium paying terms.

Eligibility Criteria:-

Age at Entry0-60 years (provided that the maximum maturity age is 70 years)
Age at Maturity (Maximum)80 years
Premium ModeYearly, Half-yearly, Monthly
Policy Tenure15, 17, 20 years
Premium Paying Term (PPT)5, 7, 10 years
Sum Assured (Minimum)Rs. 1 lakh

Money Back Plans: Riders

Money back policies provide the option to enhance your policy with add-on riders for additional coverage and security for your chosen plan. The riders cover all emergencies or uncertainties like hospital expenses, accidental death, permanent or total disability & critical illness.

These riders vary from company to company which comes with a money back plan and it relies on some factors, for example, the policy term.

Here's a list of riders one can avail on purchasing a money back plan:

  • Term Rider: This rider offers a waiver of premiums to the life insured along with life cover.
  • Hospitalization Rider: This rider helps in the payment of hospital bills in case of hospitalization of the policyholder. The daily allowance is also available in the rider for the coverage of treatment expenditure.
  • Critical Illness Rider: The rider provides financial security and protection to handle costs against critical illnesses.
  • Accidental Death Rider: As the name suggests, the riders provide extra benefits for the death of the policyholder. The beneficiaries shall receive a lump sum benefit as a death benefit.

Money Back Plans: Documents Required

The following documents are required for money back plan:

  • Identity document or age proof.
  • Document of address proof.
  • Duly filled policy application form.
  • Hospital bills and medical reports (if any).

Why Money Back Plans?

Money back plans are ideal for investment and savings along with protection for life. Here we have discussed a few key points which stand beneficial in terms of buying a money back plan:

  • Flexibility to choose policy terms and premium paying terms.
  • Investment plan comes with protection and saving acts as a boon for the future.
  • Regular payouts at an equal interval of time.
  • Guaranteed returns on investment.
  • The death benefit, maturity benefit together with survival benefit is also paid under a money back policy.

Money Back Plans: FAQs

Yes, tax is applicable when the paid premiums are more than 10% of the basic sum assured of the money back policy.

The policy lapses and benefits of the policy will terminate if you stop paying your premiums on time or even in the grace period provided by the insurer. However, a paid-up value is added, if you have paid the premiums on time for consecutive 3 years.

Yes, it is possible to renew your money back plan within 2 years from the last date of the paid premium.

It is not possible to transfer money back plan if you wish so as of now, but you can surrender the policy any time.

If the policyholder pays full premiums for at least 3 years from the inception of the policy, it will attain a cash value after which you will be able to surrender your policy. The plan also exists a surrender value based on the policy term and the total number of paid premiums.

Last updated on 21-02-2020