Most of us often keep looking for investment instruments that give assured returns over a period of time. This is done so to secure our financial life, especially at times of monetary crisis that could strike anytime without any prior notice. Traditional life insurance policy is generally preferred to secure financial future, but if the policy has not matured, it comes to no help at times of emergency. Therefore, money-back policy plan is recommended that gives financial security during the entire tenure.
What is a money back plan?
Money-back insurance policy plan was introduced by Life Insurance Corporation, providing life coverage during the entire term of the policy besides giving maturity benefits. The plan is available for the maturity term of 20 years and 25 years, where maturity benefits are paid to the policyholder in every 5 years by way of survival benefits. Premiums paid are also tax-deductible under Section 80C of the IT Act, 1961.
The plan protects the policyholder and its family during the financial breakdown at times of sudden demise or critical illness of the policyholder. In the event of death during the policy term, policyholder’s nominee can receive death claim of full sum assured with zero deductions of the amount been already paid for survival benefit. In addition, computed bonus is also paid along with the full sum assured. Hence, it is a compact package including the benefits of both insurance and investment plans.
Features of money back policy plan:
The policy plan is equipped with great features and benefits that a policyholder can enjoy during the entire term.
Survival benefits – The policy offers survival benefits, i.e. if the policyholder survives the policy term, an additional 20% of the basic sum assured would be paid at the end of every 5 year and 40% of sum assured in addition to accrued bonuses.
Death benefits – The policy gives death benefits to the surviving family or the nominee of policyholder. Under the death benefits, the nominee would receive 10 times of annualized premium or 125% of the basic sum assured along with the computed bonus. In addition, the survival benefits that have been already paid to the policyholder would not be deducted.
Maturity benefits – Money back insurance plan also gives its policyholders maturity benefits of up to 40% of the basic sum assured. The benefits are in addition to the bonuses that will be paid to the policyholder upon maturity of the policy term.
Insurance coverage – Besides offering coverage privileges, the plan also comes with dual benefits of insurance and investment. In case of any unforeseen circumstances, you can rest assure to give your family a financially secured future.
Flexible premiums – Another benefit that the money back insurance plan comes with is offering flexibility to choose the amount of premiums and payment intervals. You can start the policy with minimum investment value of Rs.18000 and make the premium payments on monthly, quarterly, half yearly, or annually basis.
Entry and exit age – Anyone being in the age bracket of 18 to 55 years can get the insurance policy either online or offline. However, the minimum and maximum age criteria could vary as per the policy terms. All you need to do is submit the proof of identity and address to start the policy term.
Best money back policy plans:LIC money back insurance
LIC launched its money back plan on February 1st, 2020 to offer a great combination of financial security along with the survival benefits. It is a participating non-linked plan that ensures monetary aid at times of financial crisis. In addition, in case of untimely demise of policyholder during the policy term, the plan would provide financial support to the deceased’s surviving family. This plan also looks after the liquidity needs of a policyholder through its loan facility.Key highlights:
• Sum assured on death is 125% of the sum assured or 10X of the annualized premium in addition to the vested Simple Reversionary Bonuses and Final Additional Bonus.
• Death benefit shall not be less than 105% of the premiums paid till the date.
• Additional survival benefits of 20% of the sum assured for every 5 year until the policy matures.
• The plan has an entry age of 13 to 50 years, while the maturity age is 70 years.
• Premium paying term is of 15 years, while the overall policy tenure is of 20 years.
• Policy offers minimum sum assured of Rs.1 lakh.
HDFC life super income plan
HDFC’s life super income plan is a limited pay and participating regular money back plan. The plan has been awarded as the Best Product Innovation at the Indian Insurance Awards, 2014. This insurance policy provides guaranteed income for 8 to 15 years and is an ideal investment option for salaried individuals. It offers assured regular income for the policyholder and its family to save them from any future uncertainty.Key highlights:
• The plan guarantees regular income for 8 to 15 years after completion of premium term.
• Policyholder has the flexibility to choose from different premium tenure and policy terms available.
• It provides additional maturity benefits by adding reversionary and terminal bonuses.
• Life coverage benefits throughout the policy term.
• The plan has an entry age of 30 days to 59 years, while the maturity age is 18-75 years.
• Policy tenure ranges from 16 to 27 years with minimum sum assured of Rs.1 lakh.
Kotak Premier Money Back Plan
Kotak Life Insurance launched its premier money back policy plan to financially secure your today and tomorrow. The plan is a great combination of savings and investments that provides lump-sum payouts at regular intervals during the entire term. Besides this, the plan also gives benefits of full life cover to the policyholder.Key highlights:
• Earn additional bonuses from 1st year onwards of the policy term.
• Maturity benefits upon surviving the entire policy tenure.
• Personal accidental death coverage benefits, where the surviving family or nominee would receive the benefits. • The plan has entry age of 2 to 57 years, while the maturity age is 75 years.
• Policy tenure ranges for 16, 20 and 24 years, with premium paying term of 8 years, 10 years, and 12 years, respectively.
• The minimum sum assured of the policy is Rs.1.5 lakhs.
PNB Metlife Money Back Policy
Punjab National Bank introduced PNB Metlife Money Back Plan to help policyholders successfully accumulate financially secured future. The plan caters to the savings as well as investment needs of a policyholder, while ensuring monetary assistance at times of crisis.Key highlights:
• The plan offers additional 10% of sum assured as survival benefits from the 5th to 9th policy year.
• 60% of sum assured is paid to the policyholder in lump sum at the time of maturity.
• The plan also has death benefits payable to the nominee or surviving family in case of untimely demise of policyholder.
• Claim tax benefits under Section 80C of the Income Tax Act, 1961.
• The plan has entry age of 13 to 55 years, while the maturity age is 65 years for policy tenure of 10 years.
• Premium payment frequency is available on semi-annual and annual basis.
• Minimum sum assured of the policy is Rs.2.5 lakh