Money back plan is a type of life insurance plan that provides twin benefits of investment and protection. As the name suggests, these plans offer you money at regular intervals and give out lump sum money in case of an unfortunate event. Such policies also provide you with guaranteed survival benefits through the term of the policy and on maturity. This allows you more liquidity than other types of life insurance instruments.
What are the benefits of a money back life insurance policy?
A money back plan offers many varied advantages. This is why they remain as the most preferred insurance products for investors of all ages and income backgrounds. Here are some ways in which a money back plan can benefit you.
- Offers sum assured
In case of an unfavourable event, the insurance provider pays out a lump sum amount as the sum assured to the nominee of the plan. This amount can be used to cover a host of expenses by your loved ones, allowing them to carry on with their lives with financial stability.
On the other hand, in case of completion of the policy term, the insurer pays you survival benefits on maturity. This will help you to fulfil your future financial goals like your dream house, child’s education, retirement, and much more.
- Provides an insurance cover
Although seen as an effective investment product, a money back plan is also an insurance instrument. You can choose a suitable cover that can be used to meet the monetary requirements of your loved ones. Such plans bring in reliability and let your family members live a dignified life even in your absence.
- Comes with a low-profile risk
Other investment products such as mutual funds, stocks, bonds, equities, etc., are affected by the fluctuations of the market. With a money back plan, you get guaranteed returns at regular intervals. The regular income and insurance cover make such plans dependable and hassle-free.
If you prefer keeping a low-risk appetite, this can be an ideal pick for you. Money back plans let you counter the risk in your portfolio. They can be used to diversify your investments and create a well-balanced pool of volatile and non-volatile instruments.
- Gives returns within a few years of investing
Money back plans act as a regular source of income. Unlike a traditional life insurance plan, these plans do not only offer maturity benefits, but they also offer a continuous stream of money at regular intervals. A money back plan is a lot like an endowment plan in this sense, one that offers returns shortly after investing.
- Offers additional bonuses
An additional bonus as a revisionary bonus gets added to the money back policy every year. This bonus is eventually paid out on maturity. Insurers also provide a final bonus at the end of the term as a reward for staying invested in the plan.
These bonuses considerably increase the overall payout and help you to fund your life goals.
- Provides tax benefits
The premiums paid under this plan are deductible under Section 80C of the Income Act of 1961. However, the premium must be less than 10% of the sum assured of the policy.
The sum assured is also paid out tax-free under Section 10(10D) of the Income Tax Act of 1961.
To sum it up
If you are looking for assured returns1, low risk, and a life cover2 to safeguard the future of your loved ones, a money back plan is a perfect choice. It also offers tax benefits3 and periodic returns4 to increase your overall liquidity. However, just like any other financial plan, it is important to pick a good insurer to invest in the right plan. ICICI Pru Cash Advantage is one such policy that can offer all the benefits as mentioned above along with the trustworthiness and bankability of a reputed brand name like ICICI Prudential Life Insurance.
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1. Guaranteed benefits are payable only if all premiums are paid as per the premium paying term and the policy is in-force till the completion of entire policy term opted.
2. Life Cover is the benefit payable on death of the life assured.
3. Tax benefits under the policy are subject to conditions under Section 80C, 80D, 10(10D), 115BAC and other provisions of the Income Tax Act, 1961. Good and Service tax and Cesses, if any will be charged extra as per prevailing rates. Tax laws are subject to amendments made thereto from time to time. Please consult your tax advisor for details, before acting on above.
4. Reversionary bonuses may be declared every financial year and will accrue to the policy if it is premium paying or fully paid. Reversionary bonus once declared is guaranteed and will be paid out at maturity or on earlier death. A terminal bonus may also be payable at maturity or on earlier death.