Money back plan

MONEY BACK PLAN

Money Back Plan

Money Back Plan is a special type of life insurance policy that falls under Endowment Plans.

In Insurance language it is called Anticipated Endowment Plans and commonly known as Money Back Policies.

Money Back Plan

A Money Back Policy is an endowment with a liquidity benefit.

It simply means that in Money Back Plans, the money comes back to the Life Insured after a specific interval of time as Survival Benefit.

Survival Benefits

The Maturity Benefit comes in installments instead of a lump sum at the end. It is called ‘Survival Benefits’.

Each installment is a percentage of the sum assured.

The remaining bit comes as Maturity Benefit at the end of the policy term.

Survival Benefits

Unlike ordinary endowment insurance plans where the survival benefits are payable only at the end of the endowment period, this scheme provides for periodic payments of partial survival benefits as follows during the term of the policy, of course so long as the policy holder is alive.

Understand better

For example, suppose if you are having a 20-year Money-Back Policy, 20% of the sum assured becomes payable each after 5, 10, 15 years, and the balance of 40% plus the accrued bonus become payable at the 20th year.

And for a Money-Back Policy of 25 years, 15% of the sum assured becomes payable each after 5, 10, 15 and 20 years, and the balance 40% plus the accrued bonus become payable at the 25th year.

Important features

An important feature of this type of policies is that in the event of death at any time within the policy term.

the death claim comprises full sum assured without deducting any of the survival benefit amounts, which have already been paid.

Similarly, the bonus is also calculated on the full sum assured.

Who should buy Money Back Policies?

Money Back Insurance Policies should be taken by someone who might require money at regular and specific intervals, like children’ s education, etc.

Also because the Death Benefit is guaranteed irrespective of the Survival Benefits already paid.

Thus, if the Life Insured dies on the year of the policy maturity even after receiving 4 Survival Benefit, the nominee would get the entire Sum Assured and not a reduced one.

You can also save tax as the premiums paid and the money received in installments are tax-free.

Be smart

You should always compare and consult with experts like Thepolicykart to find the best money back policy for your family before making a purchase.

Thank you…