If you want to secure the future of your loved ones and yourself, a money back policy can be the ideal insurance product for you. Read on to know why.

What is a money back policy?

A money back policy is a life insurance plan that provides the dual benefit of investment and protection. While you receive money at regular intervals during the policy term, it also provides a life cover which keeps your loved ones financially protected in case of an unfortunate event.

How does a money back policy work?

Here’s an example to understand how a money back policy works:

• Suppose you purchase a money back policy, such as the ICICI Pru Cash Advantage Plan, you will receive a regular income right after the end of the premium payment term. The guaranteed¹ cash benefit^* can be received monthly or yearly, as per your requirements
• At the end of the policy term, you will receive a guaranteed¹ amount along with bonuses^{^}
• The life cover in a money back policy will provide your loved ones with a lump sum amount in case of an unfortunate event

¹ Terms & Conditions apply

Benefits of a money back policy

1. Accumulated returns:

   Once the policy term ends, you receive a guaranteed amount as maturity benefit. This can be used to fulfil your financial goals like buying a house, child’s education, retirement goals, and much more

2. Added bonus:

   You receive higher returns in the form of bonuses, such as a revisionary bonus, or terminal bonus that are added to your policy over time

3. Secondary source of income:

   A money back policy offers a regular income. You start receiving this income either monthly or yearly, right after your premium payment term ends. It offers a continuous stream of money at regular intervals which can act as a secondary source of income

4. Life cover^#:

   Along with the investment, the life cover offered in the plan provides financial security to your loved ones in case of an unfavourable event

5. Tax benefits:

   A money back policy is primarily a life insurance plan. Hence, the premium paid is tax-exempt^~ up to ₹ 1.5 lakh annually under Section 80C of the Income Tax Act of 1961. The benefits received are also tax-free^~ under Section 10(10D) of the Income Tax Act of 1961

Things to know before buying a money back policy

1. Understand the features:

   Understand how a money back policy works so you can fully benefit from investing in such a plan. It helps to get a clear view of the plan you wish to invest in, including the kind of bonuses the company offers, the maximum and minimum life cover available under the plan, the credibility of the insurer, rate of return, among other things

2. Stay informed of the exclusions:

   A money back policy may not offer riders, such as critical illness cover, personal accident cover, or any such add-ons. Make sure you check the exclusions before purchasing a policy