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If you are willing to invest in a money back policy, you are up for dual benefits of savings and insurance. Read on to know the money back policy meaning and all the interesting aspects of the policy in this post.
The best thing about a money back plan is that it pays out the entire sum insured to the policy holder evenly all through the policy duration as long as the insured person is alive. So, the sum assured is dispersed as a survival benefit to the policyholder after a particular period of the policy initiation. This regular payout as survival benefit goes on till the policy matures if the policyholder is alive. You can use the money back policy calculator to calculate how much payout you will receive and at what duration.
However, if the policyholder dies before the maturity of the policy, the nominee will continue to receive the payouts and later will also receive the entire sum assured along with bonuses (if any).
Let us understand what is money back policy and the way it functions with the help of a simple example:
Let’s assume that you bought a money back policy at the age of 23 when you got your first job. In the fifth year of your policy, you receive the first survival benefit at the age of 28. You used that money to buy your first car. You received the second survival benefit payment at the age of 33 on the completion of 10 years of the money back policy. You used that money to pay off your father’s loan that he had taken during marriage to take care of the expenses. The third payout is offered on the 15th year of the policy when you have turned 38. You helped your husband with clearing the home loan with that lump sum amount. And the final payout is offered by the policy provider on the completion of the 20 years of the policy when you turned 43. You used that money along with the rest of the sum assured and bonus amount to start your own business or to meet your child’s higher education aspirations.
With the above example we hope you now know how best money back policy works and how and when you get the payout in such a policy.
Now, let us understand the features of a money back policy.
Here are some of the benefits offered by money-back policy:
The benefits offered with money back policy despite being a low-risk plan is enormous. And this makes it the best choice for people who are reluctant to take risks but who want to enjoy the perks of regular income and maturity benefit. Further, you also get a survival benefit with your best money back policy after every 5 years.
However, a policy seeker should keep note of all the features and understand all the terms and conditions of the policy carefully before buying a money back policy to serve their financial needs.
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