Why Go for Money Back Policies

Table of Content

1. Endowment, term, and money back policies

2. Why should you buy money back plans?

One big question in the minds of every insurance buyer is choosing the type of policy. This confusion arises due to a lack of knowing the differences between the different types of life insurance policies

Endowment, term, and money back policies

Firstly, all these three types of insurance policies are traditional insurance plans. All these provide life cover along with tax benefits.

Money back plans are types of endowment policies that regularly return a given percentage of the total sum assured. Here are two differences between term and endowment plans.

• Premium amount

  Term plans have a higher coverage for a lower premium.

  If you opt for the same coverage under an endowment plan, you will have to pay a significantly higher premium amount.

  The premium amount increases further if you choose a money back policy.

• Insurance and investment

  Term plans are pure life covers and offer the policy benefits to your nominees in case of your demise during the duration.

  While endowment plans combine the benefits of life coverage and investment. Your nominees receive death benefits in case of your demise or you are entitled to survival benefits.

  Money back policies offer periodic returnsduring the policy duration.

Why should you buy money back plans?

• Survival benefits

  Term plans offer the benefits to your nominees only if you pass away during the policy duration. On the other hand, a money back plan provides survival benefits that include the balance corpus (after paying periodic installments) and accrued bonus.

• Liquidity

  Money back insurance plans pay a certain amount of the sum assured at regular intervals during the policy duration. This provides you liquidity and you may plan your finances better to meet different goals during your life.

• Risk-free returns

  The amount you receive under a Best Money Back Policy is fixed. The maturity benefits received also provide you funds that may be used to meet different financial objectives.

  Choosing between money back and term plans depend on your personal needs and financial situation. If you want to use insurance as an investment product, opting for the best money back policy is recommended.

Similar Articles:

• Compare Life Insurance Plans and Policies
• How to Save Tax with Insurance?
• HDFC Life Super Savings Plan
• How to File Income Tax Returns Online
• Small Investment Options In India
• Income Tax Changes In Budget 2017
• Section 80 D Limit