For many of us, we want to invest in traditional life insurance plans for a longer term for generating a guaranteed corpus. However, we face problems when we require money before such a term is over. The financial crisis could strike at any time and one need funds for tackling it. However, a traditional life insurance plan won’t help in case the policy term isn’t over. What to do? For ensuring that none of your dreams are compromised, savings plan such as Money Back Policy is one of the great investment products which can ensure that your dreams are uninterrupted.

As you reach various stages in your life, there are several aspirations and dreams which you set forth for your family as well for yourself. However, this doesn’t relieve you from your everyday responsibilities related to managing your home, paying for school fees, health expenses, etc. Hence, Money Back Policy is most suited to individuals who are risk-averse and wish to save and create wealth through an insurance option while maintaining liquidity throughout the policy term. In case of demise of the policyholder, the nominee receives the sum assured and any survival benefits aren’t deducted.

Money back plan solves the problems related to liquidity during the policy term by paying a certain percentage of Sum Assured at regular intervals throughout the plan term. Money back plans are also great tax saving investments; you not only get a regular income and life protection but also income tax benefits under Section 80C of the Income Tax Act.

If you’re a young individual, this plan would help you regularly for your several financial needs like down payments for your home or a new vehicle, medical needs of your parents, children or self, educational needs of your children, loan pre-payments, funding the wedding of children, etc. Money back plans being an endowment policy, the risk factor is always low and hence you don’t need to worry that your investment won’t yield good returns. Almost all the money back plans offer fixed and guaranteed returns, which would enable you to plan all your finances well.

Money Back Plan Benefits

  • Offers insurance coverage during the term of the policy.
  • Pays regular benefits throughout the policy term.
  • Twofold benefits – insurance policy as well as long term investment with high returns.
  • Money back plan also offers income tax benefits under Section 80C.
  • Is relatively less risky as compared to investments in mutual funds.
  • Money Back Policy allows regular income and long-term savings.
  • Ensures that amounts are disbursed regularly.
  • Some of the best money back policy also offers optional riders which cover things such as critical illnesses, disabilities, specific illnesses, etc.

The Bottom Line

Owing to such benefits, money back plans are now among the most favored investment alternatives amongst investors. Choosing between a money back plan and a term plan would totally depend upon your financial situation and personal needs. If you’re looking for insurance as your investment tool, choosing a money back policy is the best option.

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October 2020