Money-Back Plans help your family overcome any financial troubles in case of death or accident of the earning member. With the help of Money Back Plans, one can build wealth to meet financial goals over time. In this article, you will know everything about a Money Back Plan and why they are important.
What is a Money Back Plan?
Money Back Plans are considered as a mixture of investment and insurance services. A Money Back Plan is for those investors who are looking for endowment plans for the future. Money Back Plans offer you quick liquidity and financial security in the long run.
These plans are an excellent choice for those investors who are looking for a guaranteed profit through investments. These plans make a perfect combination of insurance and investment. In these insurance plans, the policyholder receives the amount during the active period of their policy on a regular basis. These benefits are also known as survival benefits. These survival benefits are offered to the investor after a definite period.
The survival benefit is a type of reward system that is awarded to the investors for surviving the policy period. Survival benefit is allotted to the insured only when he/ she survives the term period. In case the policyholder dies amid the active period, the insurance does not offer survival benefits to the Policyholder.
In such cases, you are eligible to receive the maturity benefits. Thus, with the help of a Money Back Plan, one can get a regular income just like any other insurance plan.
Best Money Back Plan available in India in 2022
| Money Back Plan | Plan Type | Policy Term | Minimum Entry Age | Maximum entry age | Maturity period |
| AvivaDhanSamruddhi | Traditional moneyback plan | 10,15 or 20years | 13 years | 55 years | 23-70 years |
| Aegon LifeRegular MoneyBack InsurancePlan | Money-back planwith life coverage | 20 years | 7 days | 55 years (for 7-pay and 10-payoptions), | Min/Max:75 years (7-pay and10-payoption), |
| 60 years (singlepay option) | 80 years(Single payoption) | ||||
| Bajaj Allianz cashAssure | Traditional moneyback plan | 16, 20, 24,28 years | 0 years | 54 years | 18 – 70years |
| Canara HSBC OBCSmart StageMoney Back Plan | Traditionalparticipating moneyback life insuranceplan | 15 years | 8 years | 55 years | 70 years |
| Bharti AXA LifeChild Advantage | Traditionalparticipating savingsplan | 11-21 years | 18 years | 55 years | 71 years forRegular pay |
| 76 years forLimited Pay | |||||
| Edelweiss TokioLife CashflowProtection Plan | a non-linked,participating moneyback plan | 10, 15, 20and 25 years | 91 days | 55 years | Up to 100 years |
| Future Generali Assured MoneyBack Plan | Traditional moneyback plan | 15, 17, 20and 22 years | 18 years | 50 years | |
| Exide Life NewFulfilling Life Plan | Traditional moneyback plan | 85-age atthe entry | 15 years | 50 years | 85 years |
| ICICI Pru CashAdvantage | It is a non-linked,participating money back insurance plan | 15, 17 0r 20years | 0 years | 60 years | 80 years |
| HDFC Life SuperIncome Plan | Traditionalparticipating planwith life coverage | 16 -27 years | 30 years (for 18 to27 years of policyterm), | 48 years ( for apolicy term of 27years | 18 – 75Years |
| 51years (for apolicy term of24years), | |||||
| 2 years (for 16years of policyterm) | 53years (for apolicy term of 22years), | ||||
| 55years (for apolicy term of 20 years) | |||||
| 57years (for apolicy term of 18 years), | |||||
| 59years (for apolicy term of16years |
Key Features of Money Back Plan
There are many benefits of having a Money Back Plan, some of the key features of these plans are mentioned below-
Guaranteed Returns
There are different types of Money Back Plans that offer guaranteed returns to the investors. Although, you also have the choice to invest in other types of investment plans that are market-linked. These insurance plans are perfect for those investors who are looking for a secure and safe investment tool. Since this plan offers an insurance cover, it is important for all those investors who want stable returns.
Regular income through Money Back Plans
If you opt for a Money Back Plan then it will pay you a regular income. This can aid you during any financial emergency or any large expenses. These survival benefits can be gained periodically and create a second means of income. You can use the profits to pay off your debts, in buying a house, the education cost of your child, and any dream that you wanted to pursue.
Maturity Income through Money Back Plan
A Money Back Plan can also be considered as the traditional insurance cover that offers maturity benefits to the Policyholder. The returns under these plans are fixed and the maturity benefits are provided after the completion of the maturity period. You receive the sum promised under your Money Back Plan. You have a lot of options when it comes to assured sum. Money Back Plan offers an assured sum up to INR 50,000.
Affordable
These affordable Money Back Plans are ideal for those people who want to have a Money Back Plan at a lower cost. The additional amount paid on the sum assured is a cherry on the top.
Some Money Back Plans also have no limit on their insured amount. This means that the insured has the choice to opt for the most suitable plan for herself/himself.
Death benefits with Money Back Plan
If the policyholder dies due to any unfortunate reasons, then the sum assured is provided to the nominee. If your plan is eligible to receive bonus benefits then they are offered alongside the death benefits. With the help of the Money Back Plan, you can offer your family financial protection even if you are not around. The guaranteed returns offered to the family make it an excellent choice for policyholders who want a less risky and stable investment plan.
Bonus benefits with Money Back Plans
Under a Money Back Plan, you get two kinds of Bonus benefits; an additional bonus and a reversionary Bonus. The reversionary Bonus stands for every year’s percentage of the money deposited under the plan. This amount is added to the final payment of the Money Back Plan or in case of a financial emergency. The bonus benefits are provided to the policyholder every year. Sometimes an additional bonus amount is also paid to the Policyholders according to their performance and timely payment of premiums.
Add on Riders in Money Back Plan
Every kind of Insurance plan comes with add-on riders offered to the insured. These add-on riders are related to medical coverage against accidents or critical illness. Some money-back plans also offer the choice to continue the life coverage even after the insurance plan matures.
Remember to compare and research all types of Money Back Plans available in the market to purchase the best one for yourself.
Money Back Plan advantages
There are many advantages offered under the Money Back Plan, some of the major advantages of these plans are mentioned ahead-
Returns after a definite period
The best part about buying a Money Back Plan is that it offers a return option to the investors after a few years. Unlike the other long-term policies that have a long waiting period. You get the returns periodically. If you are eligible for additional benefits, they are paid when your plan matures. The benefits are offered evenly according to your policy period. In case the person dies amid the policy period, the additional bonus and maturity amount is offered to the nominee.
Money value with Money Back Plans
Some investors argue that Money Back Plans do not offer attractive returns to the policyholders but they miss the point that Money Back Plans are a type of insurance coverage and not an investment plan. There are three main benefits offered under the Money Back Plan, these benefits are survival benefits, bonus benefits, and maturity benefits. However, the survival benefits offered under these plans make them attractive insurance plans for many.
Insurance and Investment go hand in hand
There are many insurance plans that offer different investment choices like market-linked investments but the Money Back Plans are only insurance plans that offer insurance, survival benefits, and maturity benefits at the same time. In fact, you can also receive a reward through your insurance company in case of good performance. If you want a balanced investment option between traditional insurance plans and ULIPs, then money-back plans are the ideal choice for you.
Benefits of Money Back Plan
The Money Back Plan offers many benefits to the policyholders. Some of the benefits of these plans are mentioned below-
Survival Benefits
When you opt for a Money Back Plan, you become eligible for Survival benefits offered under Money Back Plans. The benefits offered under these plans are offered after a definite period and are provided until the plan matures. These benefits are offered in the form of fractions throughout the policy period.
Death Benefits
Death benefits in a Money Back Plan are offered to the nominee of the policyholder after him/her. The death benefit includes the fixed sum assured under the plan and additional benefits. It does not provide survival benefits to the nominee.
Maturity Benefits
Maturity benefits mean the money received after the maturity period is over. Money plans also offer the insurer a maturity benefit after the plan is matured. The maturity benefit includes three things that are a bonus, sum of assured survival benefits. The sum assured is the amount purchased under your Money Back Plan. The maturity benefits provide the sum assured benefits at the time your plan matures. You also become eligible to gain additional benefits under the Money Back Plan.
Bonus Amount
The bonus amount in a Money Back Plan is offered to the policyholder if they have a positive performance. It is awarded by the insurance companies. There are two types of Money Back Plan Bonuses, Reversionary Bonus, and terminal Bonus. These bonuses can add to your wealth and give you a golden opportunity to earn income.
Why do you need a Money Back Plan?
Money Back Plan is among the most popular insurance plans in India. Let’s see why you should buy a Money Back Plan.
- A Money Back Plan offers pay-outs to the insurer. It also offers the insurer a stable source of income. With the help of the Money Back Plans, you can meet your financial needs. The survival benefits can help you sail through difficult times.
- As you know now that these plans offer you the facility of investment and insurance at the same time, you have the chance to earn higher profits. You get additional benefits when the plan matures and you get a lump sum amount to meet your financial goals.
- These plans are ideal for those people who want to invest in insurance plans with guaranteed returns. These plans also offer time-to-time survival benefits to the policyholder. Thus, Money Back Plans are a good source of income for those who want to build a fund for the future.
- Money Back Plans are different from traditional insurance plans as they offer a periodical payment to the investors. These benefits are also known as survival benefits, active during the plan term.
- Thus, Money Back Plans offer investors an assured sum and financial security on their investment. you can grow your wealth with the help of this excellent insurance plan.
How does Money Back Plan work?
A Money Back policy is a type that offers policyholders Survival Benefits as well as investment opportunities in addition to Maturity Benefits.
An average Money Back policy with a 20-year tenure would thus pay the policyholder what is known as a ‘Survival Benefit’ a few years after the start of the policy. Around 20% of the Sum Assured would be paid out periodically, while the balance would be paid out at the time of policy maturity with a bonus if any. In case of the death of the policyholder, the nominee in his money-back plan receives all the benefits.
How to Buy the best Money Back Plan?
While investing in a Money Back Plan, you should choose the most suitable plan for yourself that can offer you higher returns and maximum benefits.
The first thing you should look for in a Money Back Plan is the term of the plan. One can invest in a Money Back Plan for 20 years.
Under a Money Back Plan, you become entitled to receive survivor benefits during the active term of your plan. This benefit is paid in portions/percentages so you can easily calculate it. You can cover any additional expenses with the help of these plans.
You should check the different types of Money Back Plans according to your needs. You should also check how many times you will get additional benefits and survival pay-outs on your plan. These plans have different pay-out periods. Some may pay you every 5 years or more. It also depends on the tenure of your money plan.
Policyholders should also research the taxation process on the returns earned. Some Money Back Plans do not come with tax benefits in case your assured sum has 20% of survival benefit.
Eligibility for Money Back Plan
There are definite criteria that one should meet to purchase Money Back Plans, the eligibility criteria are mentioned below-
- You should meet the specified entry age to buy a Money Back Plan. This may depend on the plan you are buying.
- You should be eligible to pay premiums mentioned under your Money Back Plan.
Documents to buy Money Back Plan
The documents required to apply for a Money Back policy are listed below:
- Duly filled Application form.
- Proof of age
- Proof of address
- Medical reports
Things you need to know before buying a Money Back Plan
If you are thinking of investing in a Money Back Plan, you must do research before buying it. Check what it offers and how you can get higher profits with its help. You need to check the plan term, returns, and benefits under your Money Back Plan.
If you are a healthy person who wants to buy an insurance plan to help you save some taxes then a Money Back Plan is the best option for you. These insurance plans provide you with regular benefits and offer guaranteed returns. You also have the choice to buy combined plans or choose an individual Money Back Plan. You have the choice to purchase a plan and invest in mutual funds, etc. Money-Back Plan can be considered as an endowment life insurance plan that offers ideal returns and stability.
A Money Back Plan is a more stable form of insurance investment. This insurance plan is more stable than ULIPs. This plan also provides tax benefits to the plan holders. With the help of the Money Back Plan, you can also buy complete life coverage. It is a beneficial option for investors or insurers.
You should keep in mind that Money Back Plans do not offer much higher returns due to their nature. These plans are insurance plans, it is natural for them to not offer many returns in comparison to mainstream investment assets.
Money-Back Plan Add-on Riders:
Money-Back Plans offer different add-on riders to the policyholders. Some of the add on riders that are common under a Money-Back Plan is mentioned below-
Accidental Death Rider: In case you meet an accident, the accidental death rider coverage protects you under your Money Back plan. In case of the death of the policyholder, the nominee receives a lump sum amount and additional benefits.
Term Rider: you can also get a waiver on your premium under special circumstances under the Money Back Plan. Even then, you get the coverage under your Money Back Plan.
Critical Illness Rider: Critical illness add-on rider also provides you financial assistance in times of need. You can get medical coverage for the specified illness under your Money Back Plan.
Hospitalization Rider: Money Back Plans also provide hospitalization add-on riders to the policyholders. You can cover your hospitalization bill with the help of your Money Back Plan. Thus it can help you carry any financial burden off your shoulders.
Money-Back Plan Calculator:
If you want to buy the best Money Back policy for yourself then you must know how much it aligns with your investment goals. To calculate the premiums of your Money Back Plan, you can take the help of the Money Back Plan calculator. These calculators can calculate the approximate amount of return for you. You can also manage your finances well with the help of a Money Back Plan calculator.
You can also see how much a plan is relevant for you in the long run. With the help of these calculators, you can manage your financial goals without much hassle.
Money Back Plan – FAQs
Q1. If I get the returns on my Money Back Plan, do I need to pay taxes?
Ans. If your premiums are around 19% or more of your assured sum, then your returns are eligible for taxation.
Q2. What will happen if I fail to pay the premium amount of my Money Back Plan?
Ans. If you fail to pay your premiums within the grace period, your Money Back Plan can lapse. All the benefits associated with these plans will cease to exist. If your premiums were paid for the 3 consecutive years then your plan will generate a reduced sum for your policy.
Q3. Can I renew my lapsed Money Back Plan?
Ans. You can renew your Money Back Plan within 24 months from the last time you paid your premiums.
Q4. Is my money eligible for transfer under my Money Back Plan?
Ans. No, you cannot transfer your money under the Money Back Plan. You are eligible to surrender your policies if you want.
Q5. How can a person surrender his Money Back Plan?
Ans. You are eligible to surrender your Money Back Plan after you attain the cash value of your plan.