Most of us would like to invest in a standard life insurance policy for a lengthy period to build a guaranteed corpus. However, we get into trouble when we require finances before the term. A financial catastrophe might occur at any time, and we will want finances to deal with it. A standard life insurance policy, on the other hand, is useless if the plan’s term has not expired. We can get a loan; however, the amount may be limited. What should I do? Is there a plan that provides lump-sum benefits during the plan’s term?
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There is, indeed. A money back policy addresses the issue of liquidity during the plan’s lifetime by paying a portion of the Sum Assured regularly during the plan’s duration. Let’s take a closer look at the plan.
What is a Money Back Policy?
A money-back plan distributes the sum promised as survival benefits’ evenly over the policy’s duration as long as the policyholder survives. If the insured is still living after a few years after the policy’s inception, the survival benefit commences payable and continues until the policy’s maturity. If the policyholder dies before the plan matures, the nominee(s) get the maturity amount, the whole sum guaranteed, plus any claim settlement ratio bonus if collected.
Key Benefits of Money Back Policy
Let us go through the benefits of the Money back policy in detail so that you have full knowledge of it.
Regular Payouts
This is one of the most significant benefits of the Money Back policy. Guarantees Returns are only realised after a few years of investing. In long-term policies, such as those lasting 15 or 20 years, the amount is paid out every few years and added to the total. The remaining benefits are paid when the plan matures. The corporation provides this reward in two stages. The first phase consists of the amount paid every few years over the policy’s term, and the second step consists of a final payout that is bigger than previous payouts and is granted at the time of maturity.
Bonus at the Time of Maturity
At the time of maturity, the bonus increases the overall payout. There are two sorts of bonuses: reversionary bonuses and additional bonuses. The former is declared on the sum guaranteed each year and is added to the overall bonus that the policyholder receives at maturity. The latter half is announced and delivered by the firm as a final bonus or a reward to the policyholder at the time of maturity.
Tax Savings
If you have paid all of the premiums under the money-back plan, you are eligible for a tax deduction of up to Rs. 1.5 Lakh under Section 80C of the Indian Income Act. You can lower your tax obligation by choosing a money back policy. This will result in an increase in money in addition to survivor benefits, sum assured, bonus, and maturity sum assured.
Secure Investment
It’s an excellent approach to protect your money. This policy guarantees returns, allowing you to enjoy your life without concern. This coverage also serves as a safeguard against any danger to your investment, which you will undoubtedly require in the future. It also lowers the risk associated with your financial portfolio.
Low-Risk Instrument
Stock market changes have an impact on investment products such as mutual funds, bonds, and so on. On the other hand, a money-back policy provides assured returns at regular intervals over the term of your insurance. This is the best option for you if you want to protect your profile from any type of harm. This policy will protect your profile from any potentially hazardous hazards.
Life Cover
A money-back guarantee is a type of insurance. To satisfy the financial needs of your loved ones, you may select a life insurance policy from a variety of possibilities. Such preparations allow your family and loved ones to enjoy a stress-free and dignified life while you are away. It’s an efficient and appealing investment that allows you to plan for your future outcomes.
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Top 5 Money Back Policy That You Must Know
We are constantly on the hunt for new strategies to produce money and ensure our financial future. We invest in a range of plans and other financial instruments with this purpose in mind. Each of these has a distinct advantage. The Money-back plan is one such instrument. Here are the top five money-back guarantees:
1. Money Back Advantage Plan by Canara HSBC OBC
This is a non-linked, participation, restricted premium payment endowment programme with a conventional savings cum protection focus. This product offers guaranteed money back distributions over the policy period, as well as a guaranteed lump amount at maturity and bonus(es) that the customer can use to meet specific set milestones.
2. ICICI Pru Cash Advantage Plan
ICICI Pru Cash Advantage is a one-of-a-kind plan that allows you to save while also providing safety. This coverage provides a guaranteed monthly payment for ten years, as well as life insurance to safeguard your family in your absence. The policyholder is also entitled to a guaranteed lump amount at maturity, as well as any incentives.
3. Aviva Dhan Samruddhi Savings Plan
The Aviva Dhan Samruddhi Plan is a non-linked, non-participating money-back scheme with assured returns. Everyone wants to save money so that they may achieve their long-term financial objectives more easily. The Aviva Dhan Samruddhi Plan is a savings-cumulative-protection plan that enables the policyholder to save funds for future investments. Throughout the policy’s life, this plan returns money to the policyholder regularly. This enables him or her to readily meet continuing financial obligations.
4. Max Life Monthly Income Advantage Plan
Max Life Monthly Income Advantage Plan is a standard participation money-back life insurance policy provided by Max Life Insurance. This single life insurance is a protection and savings plan that provides guaranteed monthly income and bonuses for a term of ten years. The plan also provides subscribers with insurance continuation benefits and death payments.
5. LIC New Money Back Policy
The Life Insurance Corporation of India’s (LIC) New Money Back Policy – 20 Years is a ‘with profits’, non-linked, participating life insurance policy. On certain predefined policy anniversaries, the policy offers generous survival bonuses. Furthermore, the policy offers a considerable death payment if the life promised dies while the policy is active, as well as a maturity benefit if the life assured survives to the end of the policy duration.
Wrapping It Up
These are some of the benefits of the Money Back Policy to consider when selecting insurance to fulfil your needs. A Money-Back Plan is an excellent alternative if you want life insurance, guaranteed profits, and minimal risk all in one plan.
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