Money Back Policy

Did you know? According to the IRDAI annual report, out of 100 life insurance policies sold, only 30-40 will complete their tenure. Yes, you heard it right. The most common reason for surrendering a policy is the inability to fulfil it financially.

So, what if we tell you that some policies start paying you right after the end of the premium payment term? In the article, we will discuss money-back plans and why these plans are quite popular nowadays.

What is a money-back policy?

Money-back policies are the type of insurance plan that offers comprehensive benefits of regular payout along with guaranteed death and maturity benefits. The regular payout is the pre-determined proportion of your sum assured that is paid at regular intervals during the whole policy tenure.

The regular payout can be utilised for various purposes such as education, marriage, purchasing a house, or completing other financial goals.

Plans such as ICICI Prudential Guaranteed Income for Tomorrow, Bajaj Allianz Life Life-assured Wealth Goal, Tata AIA Guarantee Return Insurance Plan, Bharti AXA Guaranteed Wealth Pro, and Edelweiss Tokio Life Guaranteed Growth Plan offer Money Back Plans.

Best Money Back Plans in India

Here is the list of best Money back plans in India:

Plan NameEntry agePolicy termPremium paying termLife coverICICI Pru Guaranteed income for tomorrow18-45 years5-12 years10-20 yearsRs. 12 lakhBajaj Allianz life life-assured wealth goal18-50 years99 minus entry age7-12 yearsRs.15 lakhTata AIA guarantee Return insurance plan18-65 years6-40 years5-12 yearsRs.18 LakhBharti AXA Guaranteed Wealth pro18-60 years36-38 years5-12 yearsRs. 12.1 lakhEdelweiss Tokio Life Guaranteed Growth Plan18-60 years10-30 years5-10 yearsRs. 12 Lakh

How does a Money back plan work?

As the word suggests Money back, Money back plans are the type of life insurance plans that offer a pre-determined regular payout from the sum assured, at each specific policy interval.

Let’s understand by real case scenario

Mr. Vishal Sharma, a 30-year-old private employee. Mr. Vishal bought a 30-year money-back policy along with the sum assured of Rs. 1 Crore. The money-back plan offers Mr. Vishal 15% survival benefits every five years, starting from its inception.

Now, Mr. Vishal will receive an amount equal to Rs.15 Lac at every fifth, tenth, fifteenth and twentieth year and so on. Along with an amount of Rs. 10 Lac plus any bonuses at maturity.

In case, of unfortunate death of Mr Vishal has passed during the 15th policy year. The plan will pay an amount of Rs. 70 Lac to the nominee.

Why should you choose money-back plans?

Money-back plans are designed to offer a steady source of income, apart from stocks and mutual funds these plans are not dependent on marker performances. Hence you can rely on them to receive regular guaranteed income for the whole policy tenure.

For your instance, here are some unique features of Money back plan:

Guaranteed returns

It offers guaranteed returns regardless of market fluctuations.

Life coverage

It offers life insurance coverage for the entire policy term. In case of any unfortunate event, the death benefit is equal to the sum assured paid to the nominee.

Bonus and addition

These policies offer Bonus at regular intervals as per the insurance performances. The bonus will be automatically added to the sum assured and paid at maturity.

Flexibility

These plans offer flexibility to choose from various premium payments and policy terms. You can choose any specific that fulfils your requirements.

Regular payout

Money-back plans offer a regular payout to the nominee at pre-determined life stages. The payout will be paid from the sum assured chosen at the time of policy purchase.

Fixed deposits vs Money back life insurance: A Quick Comparison

ParametersFixed depositsMoney-back life insuranceReturnsOffers a fixed return on your money after a certain time.A life insurance product that offers guaranteed money-back along with life cover.GuaranteeFixed-rate of returnNo fixed rate but returns are offered.Policy tenureUsually ranges between 7 to 10 years.Ranges between 10 to 30 years.Mode of payoutLump sum payout on maturity.Choose your payout option whether lumpsum, regular, or a combination of both.Partial withdrawalsCharges are applicable on partial withdrawals.Partial withdrawals vary from insurer to insurer.Investment AmountYou can start investing from as low as Rs 5,000.The minimum investment amount depends on the policyholder’s age, chosen riders, etc.

What are the eligibility criteria to purchase Money-back plan?

For purchasing a money-back plan, one should fulfil the below parameters

The Minimum age of the customer must be 18 years and the maximum goes upto 55-65 years.The customer must have a stable source of income, for not missing the premium due dates.Money-back plans offer policy terms from 10-25 years, it can’t go beyond the permitted age.

Money Back Plans Benefits

Here are the benefits of Money Back plans:

It offers the dual benefit of investment and insurance.It pays a guaranteed income payout during the whole policy tenure.It offers tax benefits under sections 80C and 1010D of the Income Tax Act 1961.Apart, from regular payout these plans also offer maturity benefit.

List of riders available in Money Back Plans

Following is the list of riders available in Money Back plans

Waiver of Premium

In case of any unforeseen event, in which the life insured is diagnosed with partial disability. All the future premiums of the plan will be waived.

Accidental death benefit rider

In case of any unforeseen event, in which the life insured loses their life. A Rider sum assured will be paid to the nominee along with the plan sum assured.

Terminal illness rider

This rider will pay a cash benefit to the nominee in case of any diagnosis of any terminal illness during the policy term.

Critical illness rider

This rider will pay the rider sum assured, upon diagnosis with any of the critical illnesses during the policy term.

Accelerated sum assured

This rider will provide a portion of the sum assured in case he/she is diagnosed with any critical disease during the policy tenure.

How to purchase a money-back plan?

Here are the steps to purchase Money back plan from an insurer:

Step 1: Visit the official website of the insurer.

Step 2: Select Mone back plan from their main page.

Step 3: Compare different plans as per Premium, coverage and benefits.

Step 4: Choose a plan that suits your needs.

Step 5: Fill all mandatory details and make payment.

Step 6: Review the policy document.

Document required to purchase Money Back Plans

Following is the list of documents required to purchase money-back plans:

Age proof (Anyone)

Aadhar cardPan cardVoter ID cardPassport

Address proof (Anyone)

Aadhar cardPan cardVoter ID cardPassport

Income proof: (Anyone)

Bank statement.Salary slips.Passbook

Final words

Money-back plans are always considered as the best investment if you are looking for steady income during whole policy tenure. This plan provides comprehensive benefits of investment and insurance.

For any queries, related to money-back plans you can directly contact PolicyX.com. Our trusted financial advisors will solve every possible query and suggest you the best money-back plan.