Due to the abundance of choice and variety of features in each life
insurance plan, it is not an easy task to choose the investment plan
that suits you the best individually. Added to this, every Insurer
company offers attractive schemes to allure you and make you buy their
If you are the one who wants fixed investment
returns and with this you have certain responsibilities or ambitions in
life that you want to accomplish in diverse time frame ranging in years
you might find Money Back Policy
a perfect investment plan for you.
from fixed investment returns and periodical payments there are many
more characteristics attached to money back policy. Read on further to
know what purpose this investment plan can serve you and does it suit
your financial structure or not.
How does money back Policy
amount invested by you in terms of Premium
is divided in two parts in
which one part is utilized to provide you assurance and Risk
other part is used as investment in government securities or financial
instruments where fixed investment returns are guaranteed with zero
percentage of risk.What is the concept of periodical payments?
gets Survival Benefit
under this plan that is, the insured gets
lump sum amount which is a fixed percentage of sum Assured
interval of time in case of insured’s survival.
For instance, Mr.
A bought the money back policy for 20 years and his Sum Assured
100,000, then he is entitled to get a lump sum amount of Rs. 20,000
which is 20% of sum assured at the interval of every five years for
three times. Now, 60% of sum assured is already paid to Mr. A at the end
of 15th year. And, rest of the 40% plus dividends is paid as lump sum
at the Maturity
of the policy i.e., at the end of 20th year.Survival benefit and death benefit
above calculation takes place in case of survival of the insured and
therefore, periodical payment is also called as survival benefit.
Whereas, there is another opposite Term
called Death Benefit
back policy. The term death benefit stands for the lump sum amount
which includes total sum assured plus dividends irrespective of survival
benefit that is, if Mr. A has received survival benefit of Rs. 40,000
and he dies before maturity of the policy, his nominee would be paid
death benefit of Rs. 100,000 plus dividends and survival benefit of Rs.
40,000 would not be deducted from the sum assured.
features would definitely appeal you to invest your funds in money back
policy but, there are certain limitations to this plan. Let’s see what
they are and would they fit into your criteria of buying life insurance
You can buy money back policy only for 20 or 25 years i.e.,
not less than 20 years or not more than 25 years. Other restriction is
that you cannot buy the plan for sum assured less than Rs. 40,000. The
maturity age is 70 years i.e., maximum age to buy the plan is 50 years
for a 20 year policy or 45 years of age for 25 year policy. Moreover, if
you want to convert your money back plan into any other kind of plan,
then the option available to you is only term plan.
If you find that the above points can easily blend with your financial plan, go ahead and buy the money back policy.