A money back policy is a popular form of life insurance. It helps you plan and manage your finances and save for specific goals in life. This plan keeps your life covered along with a saving platform. Take a glance at this article to know more about the various benefits a money back plan offers you.
Let us start by understanding how a money back plan actually works. A money back plan is a type of life insurance plan, wherein the sum assured is broken up into various parts and paid over a period of time. You can thus space out the payments according to your needs. However, in the event of death within the policy period, your nominees get a benefit as well. A money back plan helps you to build up a good corpus and take care of the various important milestones of life, while keeping your life insured. There are host of benefits that a money back plan offers. We speak about each of them in detail in this article.
The main benefits of buying a money back plan are:
1. Regular pay-outs: Money back plans offer you a certain percentage of the maturity benefits at regular intervals. You can opt the amount you want and at what stage in life. Say for example, you can opt to get 15% of the sum assured five years after you buy the policy. You can opt for another 20% on the 10th anniversary of the policy and the remaining amount on the policy maturity. Thus,helping you meet the various financial milestones of life with the money back life insurance plans.
2. Tax benefits: One can avail many tax benefits with a money back plan. The premium that you pay towards the money back policy is exempted from tax, provided it is less than Rs.1.5 lakh. Further to this, The dividends you earn are tax free and in the event of death of the policy holder, a death benefit is paid out, your nominees will be exempted from paying tax on that either. So as you can see, the biggest benefitof tax saving that your money back life insurance planoffers.
3. Life cover& family’s financial safety: A money back policy is a type of a life insurance plan and its biggest advantage is that it offers you coverage for your life. In the event of unexpected death, your nominee will get a sum assured with which they can meet their financial challenges and lead their life smoothly without cutting down on lifestyle and necessities even after your demise.
4. Guaranteed &risk free returns: The money back plan also offers a risk-free investment opportunity for you. The money you put in is invested in low risk financials such as cash bonds and securities. So there is absolutely no chance of you losing any of your money. Mutual funds and stocks pose a much higher risk due to the regular fluctuations in the markets. However, money back policies are a combination of both insurance as well as returns. This is the reason they pose less risk. The returns are totally guaranteed and your financials grow at a pretty steady pace.
5. Waiver of premium: This is a benefit offered with the money back plans. In the event of death of the policy holder before the policy ends, the premium is waived off. The plan however continues to be in force and the regular payments are made as well. This is a beneficial feature of some money back plans like child plans and on other plans you need to buy. This makes the plan very ineresting and a must have.
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