Money back plans protect your family’s financial interests from circumstances such as death or critical illness of the policyholder.
What is Recurring Deposit?
Money back plans are one of the most popular life insurance plans in India. Under these plans, the policyholders receive frequent payouts as the death benefit, in case the policyholder survives. These packages include both insurance and investment plans.
A money back insurance plan pays out the same maturity benefits in the form of several guaranteed “survival benefits” which are staggered evenly throughout the course of the policy. So, a money back insurance policy is an endowment plan with the benefit of regular liquidity.
Why You Need To Buy a Money Back Plan?
A money back plan provides periodic pay-outs, ensuring a steady source of income to help policyholders meet expenses at different stages during the policy duration.
Money back plan provide the benefits of an insurance policy as well as an investment, ensuring that the policy earns the policyholder an income instead of just merely providing a lump sum in case of his/her demise.
These plans offer a guaranteed return on investment as well as periodic pay-outs and insurance cover, making it an ideal plan for individuals looking for both protection as well as a source of income.
In addition to the standard life insurance offered by regular policies, a money back plan offers a policyholder a maturity benefit as well as a regular income in the form of ‘survival benefits’ for the duration of the policy.
A thus provides policyholders with a secure and assured return on investment in addition to providing them with an opportunity to grow their wealth through investment opportunities.
Features of Money Back Plan
The money back plan has a number of distinct features that set it apart from other life insurance products, as mentioned below:
- Money back plans provide policyholders with low risk investment options as well as insurance coverage.
- The policies provide a regular source of income in the form of ‘Survival Benefits’ for the duration of the policy.
- In the event of the policyholder’s demise during the policy term, the entire Sum Assured is paid out to the nominee irrespective of the amount already paid through the Survival Benefits.
Benefits of Money Back Plan
- Provides insurance cover during the policy term.
- Pays out regular benefits throughout the term.
- Works as an insurance policy as well as a long-term investment with good returns.
- Provides tax benefits.
- Less risky than other investments offering similar returns like mutual funds.
- Enables long-term savings and regular income.
- Ensures that amounts are disbursed regularly.
- Some plans extend the insurance coverage guaranteed death benefits even after the maturity date and the last survival period, up to when the life insured attains the age of 100.
- There are optional riders that cover things like specific illnesses, critical illnesses, disabilities, etc.