What Are the Benefits of a Money Back Life Insurance Policy?
A money-back life insurance policy comes with a slew of benefits. As a result, they continue to be the most popular insurance product among investors of all ages and economic levels. Here are some of the ways that a money-back guarantee may help you.
Offers sum assured
In the event of a negative occurrence, the insurance company pays the plan’s nominee a lump sum amount as the sum promised. This sum can be used by your loved ones to pay a variety of costs, allowing them to continue living their lives with financial security.
On the other side, if the insurance term is completed, the insurer pays you survival benefits at maturity. This will assist you in achieving your long-term financial objectives, like buying your ideal home, funding your children’s education, retiring, and so on.
Provides an insurance cover
A money-back plan is an insurance tool as well as an excellent investment product. You can select a proper policy that can be utilized to satisfy your loved ones’ financial needs. Such arrangements provide stability and allow your family to live a decent life even when you are not present.
Comes with a low-profile risk
Market changes affect other financial products such as mutual funds, stocks, bonds, and equities, among others. You get guaranteed1 returns at regular periods with a money-back plan. Such plans are trustworthy and hassle-free due to the monthly income and insurance coverage.
This is an excellent choice if you like to maintain a low-risk appetite. Money-back plans allow you to mitigate portfolio risk. They can help you diversify your portfolio and establish a well-balanced mix of volatile and non-volatile instruments.
Gives returns within a few years of investing
Money-back life insurance plans provide you with a consistent source of income. Unlike typical life insurance, these policies provide a continual inflow of money at regular periods in addition to maturity benefits. In this way, a money-back plan is similar to an endowment plan in that it pays off quickly after you invest.
Offers additional bonuses
Every year, an additional bonus is added to the money return policy called a revisionary bonus. This bonus is given out at the end of the term. As an incentive for keeping engaged in the plan, insurers also offer a final bonus at the conclusion of the term. These bonuses help you fund your life goals by significantly increasing the overall reward.
Provides tax benefits
The premiums paid under this plan are deductible under Section 80C3 of the Income Act of 1961. However, the premium must be less than 10% of the sum assured of the policy. The sum assured is also paid out tax-free3 under Section 10(10D) of the Income Tax Act of 1961, subject to conditions mentioned therein.
