6 Reasons to Invest in Money Back Policy

A money-back policy is perfect for individuals who want a guaranteed return on their investments as well as monthly payments as well as insurance coverage for themselves for the same money they put in as a premium. Unlike a typical life insurance policy, which only pays an amount once the policy matures, the money back plan begins to pay a sum known as a "survival benefit" during the policy's lifespan.

 
When Does Payment of Survival Benefit Begin?

This survival benefit begins a few years after the commencement of the money-back plan and continues until the money-back policy matures. As the name implies, the survival benefit is compensation from the firm to the insured individual for surviving. This reward is payable only if the insured is still alive. 

These survival benefits are no longer available in the event of an unfortunate incident that leads to the death of the insured person. In such circumstances, the nominee(s) receive the whole maturity amount, regardless of how much survivor benefits have been paid, as well as any bonus that has accumulated.

As a result, the money return plan, like ordinary life insurance plans, provides continuous income as well as a maturity bonus. It is accurate to say that keeping your money in a regular bank account is less dangerous than investing in the money market. However, now is the time to think about the "money back policy" option if you're searching for higher returns.

Why Should One Invest In A Money Back Policy?

Following are some key benefits offered by money back plans considering which you must invest in these life insurance cum investment plans -

1. The Complementary Benefits Of Insurance And Investment - Money back policies provide you with the benefits of both insurance and investing. They provide life insurance and also invest a portion of the premiums in the stock market. As a result, a money-back policy allows you to save for your future ambitions in addition to safeguarding the future of your family.  

Investing in money-back programs is less dangerous, it should be noted. These plans invest in cash bonds and securities, which are less susceptible to changes in the market. As a result, purchasing money-back coverage is comparatively safer.

2. Consistent Payments - Money back plans periodically provide you a predetermined portion of the maturity benefits. You have the freedom to decide how much and when in your life. You can pick the payouts to support you during specific life phases or invest in these monthly income schemes to augment your primary income. 

To assist with your child's education, for instance, you might choose to choose 20% of the insured value five years after purchasing the insurance. The remaining amount can be chosen when the money return insurance reaches maturity to help you plan for retirement, along with an additional 20% after the subsequent 10 years for your child's marriage.

3. Guarantee The Financial Security Of Your Family:
A money-back policy's life insurance component is its most crucial element. Your nominee will get an assured payout in the event of your passing. By doing this, you can prevent putting your family in financial hardship. With this money, they can cover their daily bills and essentials. So you can look after them even when you're not there.

4. The Benefit of Premium Waiver
The subsequent premiums are not due if the policyholder dies before the policy's term has ended. The plan is still in effect, though, and payments are sent on schedule or at predetermined intervals. This is a notable quality of money-back guarantees.

5. Tax Advantages
Regular premium payers of the money-back policy are eligible for a tax advantage. Section 80C of the Income Tax Act of 1961 defines the benefits of these programs. Additionally, the monthly investment plans' incentives, survivor rewards, and maturity benefits are all tax-free.

6. Improved Investing Discipline
Investment managers under the money back plans are accountable for attracting further investment by keeping money secure. They employ a variety of tactics to maintain the investment lucrative by seeking out high-yielding opportunities. They make deliberate and disciplined decisions on when to sell and when to acquire.

Conclusion

Before purchasing a money-back policy, it is usually essential to conduct research. Online, there is a lot of knowledge available. Various online calculators may be used to compare the plans. Additionally, you may ask your financial counsellor for guidance on the most suitable money-back guarantee. Before you sign on the dotted line, make sure to carefully read the documentation to understand the details of the plan.

Also read: Know Everything About The Best Money Back Plans In India

How To Cancel Your Money-back Policy Before The Maturity Time?