A secure future is the need of the hour because life is unpredictable, and accumulating funds can be tricky in times of emergency. Living with the complexities of the world and managing wealth becomes difficult when an unforeseen situation stands at the door. In such times, an insurance policy can help to stabilise the situation and give the insurer survival benefits at regular intervals of time. There are many savings plans available in the financial market, but the most popular among them is the money back policy.
In this blog, we will discover more about the money back policy, its benefits, and why it is becoming the most sought-after insurance plan among individuals.
Knowing About the Money Back Policy
A money back policy is a life insurance policy with a combination of insurance coverage and savings. It is different from the traditional life insurance policies that pay the assured sum only upon the demise of the insurer.
In this policy, the policyholder receives survival instalments at periodic intervals, even if they outlive the policy term. Also, in case of the demise of the policyholder during the tenure, the nominee will be paid the total sum assured and accumulated benefits, regardless of the amount paid as survival benefits earlier.
Furthermore, it is also a type of endowment policy with the benefit of liquidity. It provides life coverage and also pays a sum of the amount at regular intervals of 5, 10, 15, and 20 years as a benefit amount. The survival benefits are not deducted from the lump sum amount paid after the policyholder passes.
The Need for a Money Back Policy
Individuals who are seeking a combination of life cover, savings, and regular income can opt for a money back policy.
- It provides guaranteed returns on investment and annual payouts, making it an excellent choice for those seeking income and security.
- Those who want to avail of tax benefits under Section 80C and want regular income through insurance can opt for a money back policy.
- There are many kinds of money back policies depending upon which stage of life you are in, and you can choose accordingly. For example, a money back policy for a child can help secure their future in a planned manner.
Key Features of a Money Back Policy
The key features of a money back policy include periodic payouts, risk cover, and maturity benefits.
- Periodic Payouts: The best feature of a money back policy is that it provides periodic payouts to the policyholder. It ensures financial support by providing a steady income at regular intervals for various needs, such as education, marriage, or any unforeseen circumstances. These periodic payouts are also known as survival benefits, helping in times of rising inflation by giving out fixed funds.
- Risk Cover and Maturity Benefits: The money back policy offers a risk cover in addition to the survival benefits. It means that in the unfortunate demise of the policyholder during the tenure of the policy, the nominee is entitled to receive an entire amount assured with accrued benefits. Also, the survival benefits paid earlier won’t be deducted from the total amount. The policyholder gets maturity benefits if he survives the policy tenure.
Tips to Choose the Right Money Back Policy
There are a few things to keep in mind while choosing a money back policy:
- Assessing Financial Goals: Before opting, one should determine their financial goals, as a money back policy can help fulfil short-term and long-term goals. Evaluating your financial goals will help you choose the right money back policy with the necessary features.
- Deciding the Policy Term: One should choose a policy term depending on when they need to meet the goals. It is best to select a money back policy that will offer payouts at a time that matches your financial needs.
- Comparing Policies: There are numerous money back policies available in the market from reputable insurance providers that offer different plans, sum assured, and maturity benefits. Opt for the one that covers all your financial requirements and even aids in financial stability in the present and future. Also, check for transparency in terms of charges and claims.
- Thoroughly Understand the Terms and Conditions: One should read the policy documents to understand the terms and conditions under which the policy may lapse or become void. Terms and conditions help in understanding the payout, maturity benefits, and other information so that everything is clear while moving ahead with the policy.
- Availability of Rider Benefits: Many money back policies come with the benefit of adding optional riders that help the policyholder be well-prepared for any future emergencies. Some of the optional riders available on money back policies are Critical Illness Rider, Hospitalisation Rider, Waiver of Premium, and Accidental Total Rider.
Secure Yourself and Your Family with the Right Money Back Policy
A money back policy is a secure investment plan that helps to achieve financial stability during the policy term and in the future. Do consider the tips mentioned above to choose the most suitable money back policy from a reputable insurance provider.
If you are searching for a money back policy, you can consider one of the most trusted insurers, like TATA AIA. They provide a money back policy with excellent benefits and optional rider availability. So, avail yourself of the policy now and give yourself the best financial security.