5 min read
Updated on Nov 28, 2022
Investing for the future is very important if you want to secure your life and the lives of your loved ones. There are several ways to secure yourself financially by investing money in different plans. A Money Back insurance policy is one such way to invest in a policy with guaranteed returns. Let us understand the overview and key features of a money back policy in this post as well as analyze the best money back plans available in the market.
A money-back insurance policy is a plan that allows the insured to avail the dual benefits of life cover as well as investment. It is an endowment plan that offers the advantage of regular returns at regular intervals during the tenure of the policy. Further, since money back plans also offer the benefit of insurance, the loved ones of the insured can have financial protection in the event of sudden demise of the policyholder.
Let us understand the working of a money back policy with the help of an example:
Suppose you bought a money back policy from a reputed insurer for a term of 20 years. Now, you would start receiving survival benefits a few years into the plan. 20% of the sum assured would be paid as regular income periodically. The balance is paid in the form of maturity at the end of the policy term. The benefit in the form of guaranteed cash can be availed either on a monthly or yearly basis, depending on your need.
In addition, you will also receive a guaranteed bonus amount. Besides, if you die anytime during the term of the policy, your nominee will receive a lump sum amount as death benefit. Overall, there are many advantages of a money-back policy.
Policy seekers of money-back plan are required to meet certain eligibility criteria as listed below:
Below are some of the Money-Back Policies in India available online:
|Plan Name||Eligibility in Years||Policy Tenure in Years||Max. Maturity Age||Features|
|LIC Money Back Plan 20 Years||Min – 13
Max – 50
|20||70||– Death Benefit
– Survival Benefit
– Maturity Benefit
– Participation in Profits
LIC Bima Bachat
|Min – 15
Max – 65
|9, 12, 15||75||– Death Benefit
– Guaranteed Surrender value
– Maturity Benefit
– Loyalty Benefits
|HDFC Life Super Income Plan||Depends on the policy term||16, 18, 20, 22, 24, 27||75||– Death Benefit
– Maturity Benefit
|SBI Life-Smart Money Back Gold||Min – 15
Max – 55
|12, 15, 20, 25||70||– Participation bonus
– Death Benefit
– Survival Benefit
To make sure that you receive the maximum benefit from your money back plan, it is important to choose the plan wisely.
Now that you know the money back policy meaning and its importance to secure your future, you must select a plan wisely to ensure maximum benefits. You can even use a money back policy calculator to check the premium that you need to pay to receive the benefits you seek.
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If a policyholder fails to pay the premium of money back policy within the grace period, the policy lapses. If that happens, you lose all the benefits associated with the policy. However, if you have been paying the premiums for 3 years, a paid up value can be created for a reduced sum. Yes, you can revive a money back policy within 2 years from the date of the last paid premium. No, it is not possible, as of now, to transfer a money back policy. However, it can be surrendered if desired. To surrender a money back policy you have to wait till the policy attains cash value, which comes after 3 years of paying premiums for the policy. The surrender value of the policy depends on the tenure of the policy and the number of premiums paid. Money back policies are good because they are less risky as compared to investing in a mutual fund.
Is there any penalty levied on policyholders if they do not make an on-time premium for their money back policy?
It is possible to revive a money back policy?
Are money back policies transferable ?
How to surrender my money back policy?
Are money back policies good?
If a policyholder fails to pay the premium of money back policy within the grace period, the policy lapses. If that happens, you lose all the benefits associated with the policy. However, if you have been paying the premiums for 3 years, a paid up value can be created for a reduced sum.
Yes, you can revive a money back policy within 2 years from the date of the last paid premium.
No, it is not possible, as of now, to transfer a money back policy. However, it can be surrendered if desired.
To surrender a money back policy you have to wait till the policy attains cash value, which comes after 3 years of paying premiums for the policy. The surrender value of the policy depends on the tenure of the policy and the number of premiums paid.
Money back policies are good because they are less risky as compared to investing in a mutual fund.
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If you are an investor with a low-risk appetite, who is averse to volatility and wants clear information on the returns that would be received,.
Planning for the future comes naturally to most human beings. And most people wish to have a fixed source of income so that tomorrow even.
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