What is a Money Back Policy?
A life insurance policy offers life cover to the person who purchases it i.e. a person pays certain amounts of money consistently towards a policy so that his/her family member, known as the beneficiary, is given the sum of money promised when the policyholder expires.
A money back plan is a type of life insurance plan that allows the policyholder to receive payouts at regular intervals during the policy term as part of the survival benefit. Insurance companies offer a survival benefit as a reward for survival. While this benefit is availed at the end of the policy term in most life insurance policy types, the money back policy has the unique feature of providing regular payouts during the policy tenure, to the policyholder.
A money back policy installment-sent plan that gives you some part of the maturity benefit in regular installments before the scheme period ends. The policyholder will receive regular payouts as long as he or she is alive, instead of a single lump sum at the end of the policy period or at death. However, once the death benefit payout is done or the maturity is reached, no further payments will be made through the policy. It is an investment-cum-insurance scheme which also has the advantage of liquidity after a few years. Money back policy is known as an Anticipated Endowment Plan in insurance parlance.
Best Money Back Policies in India:
Some of the most popular money back policies in India are listed in the table below:
|Money Back Plans||Premium Payment Options||Policy Term||Min Entry Age||Max Entry Age||Maturity Age||Min Sum Assured|
|SBI Life – Smart Money Back Gold||Regular Pay: Annual, semi-annual, quarterly, monthly||12 years, 15 years, 20 years, 25 years||14-15 years||45-55 years||27 to 70 years (67 years for 12-year plan)||Rs.75,000|
|HDFC Life Super Income Plan||Limited Pay – 8, 10 or 12 years: Annual, semi-annual, quarterly, monthly||16 years, 18 years, 20 years, 22 years, 24 years, 27 years||30 days to 2 years||48 to 59 years||18 to 75 years||Rs. 1,28,337|
|LIC Money Back Plan 20 Years||Limited Pay for 15 years: Annual, semi-annual, quarterly, monthly||20 years||13 years||50 years||70 years||Rs.1 lakh|
|Reliance Nippon Life Super Money Back Plan||Limited Pay for half of the policy term: Annual, semi-annual, quarterly, monthly||10 years, 20 years, 30 years, 40 years, 50 years||18 years||55 years||28 to 80 years||Rs.1 lakh|
|Aviva Dhan Samruddhi||10 years: Annual, semi-annual, quarterly, monthly||10 years, 15 years, 20 years||13 years||55 years||23 to 70 years||Rs.1 lakh|
|Birla Sun Life Insurance Bachat Moneyback Plan||Regular Pay: Annual, semi-annual, quarterly, monthly||20 years||13 years||60 years||33 to 80 years||60 times the monthly base premium|
|ICIC Prudential Cash Advantage||Limited Pay – 5, 7 and 10 years||15 years, 17 years, 20 years||0 to 3 years||60 years||18 to 80 years||105% of total premium paid|
How does Money Back Policy work?
When you buy a money back policy, you will be told for how long you need to pay the premiums. Some policies require you to pay premiums throughout the tenure, while in some policies you need to pay for a limited number of years only. This premium will be invested in secure avenues, and a small part of the amount goes into administrative fees and taxes. Once you start paying the premium, you will receive a certain percentage of the sum assured at regular intervals. This may happen while you are paying the premiums, or after you’ve stopped paying the premiums. The policy document will also tell you when you will start getting the money back payouts. Some policies give you cashback every 5 years, while some give you every year towards the last few years. You will continue receiving the money back until the scheme reaches maturity or until the policyholder dies, whichever is earlier.
If the policyholder meets his maker before the scheme’s maturity, the nominee/s will get the sum assured and death benefits as per the policy terms. Even if money back payouts have been made before the death of the insured person, it will not affect the sum guaranteed as death benefit. You can add riders to the money back plans to increase your protection levels and get higher death or maturity benefits. You’ll have to pay a slightly higher premium if you are adding riders to the policy. Maturity benefits, along with sum assured and accrued bonuses, are given to the policyholder if he or she outlives the plan.
Money Back Policy vs Term Insurance – Which should you choose
Money back policies and term insurance policies are two of the most popular types of life insurance products. Listed below are a few differences and similarities between these two types of products.
- Sum Assured: The key benefit of term insurance plans is that they offer a high sum assured to prospective policy buyers. On the other hand, if you wish to opt for a high sum assured when you purchase a money back policy, you will also have to pay a hefty premium amount.
- Premiums: When compared to other life insurance products, term insurance plans offer a relatively lower premium rate, since they don’t have a cash value attached to them. In comparison, since money back policies have a cash value, the premium payable is likely to be significantly higher than that of a term insurance plan.
- Payouts: Under a term insurance plan, the insurer is liable to pay a death benefit in the event of the policyholder’s death. However, in case the policyholder survives till completion of the policy tenure, no payout will be provided. With regard to money back policies, policyholders receive frequent payouts, during certain pre-defined policy anniversaries, in the form of survival benefits. In addition, at maturity of the policy, the policyholder is also entitled to receive the maturity sum assured. In the event of the policyholder’s death, the nominee is paid out a death benefit. Thus, money-back plans can be instrumental in helping you meet key financial milestones in your life.
- Policy Loan: Since term insurance plans do not acquire a cash value, policyholders cannot avail a loan against these plans. On the other hand, money back policies offer policyholders the option to take a loan against their policy. In most cases, policyholders will only be able to take a loan against their policy after the policy has acquired a surrender value.
- Riders: For both types of plans, policy buyers are given the option to enhance their coverage by purchasing riders and add-ons offered by the insurer. However, the exact number of riders offered for term insurance plans and money back plans will vary from insurer to insurer and plan to plan. Thus, you will need to assess your needs and purchase riders accordingly.
- Tax Benefits: Both term insurance and money-back plans offer tax benefits to the policyholder. Thus, customers can avail tax rebates for both premiums paid during a financial year and benefits received, under Section 80C and Section 10(10D) of the Income Tax Act, 1961.
Some of the documents that are usually asked by insurance companies are listed below:
- ID Proof: A valid photo identity card issued by the government or a company, such as Passport, PAN Card, Driving Licence, Aadhaar, Voter’s Identity Card, MNREGA Job Card, company ID card, etc.
- Residence proof: Apart from the above ID cards that include your permanent address, you might be asked for rental agreement (if you’re staying in a rented house), latest utility bills, Property Tax or Municipal Tax receipt, bank account or Post Office savings account statement or passbook, and other documents issued by the government of India.
- Age proof: Any government ID card or document, or a school leaving certificate that has your date of birth.
- Income proof: Latest payslips or certificate of employment.
- Your latest photographs.
मनी बैक इंश्योरेंस प्लान:
मनी बैक बीमा पॉलिसी, जैसा कि नाम सुझा सकता है, वे हैं जो पॉलिसीधारक की असामयिक मौत के मामले में लाभार्थी या पॉलिसीधारक के नामांकित व्यक्ति को एकमुश्त राशि का भुगतान करते हैं। मनी बैक बीमा पॉलिसियों द्वारा पेश परिपक्वता लाभ कई अलग-अलग गारंटीकृत “उत्तरजीविता लाभ” के आकार में होंगे जो पूरे पॉलिसी में आनुपातिक रूप से आवंटित किए जाते हैं। सीधे शब्दों में कहें, एक मनी बैक बीमा योजना सिर्फ एक एंडॉवमेंट पॉलिसी है जो नियमित तरलता का लाभ प्रदान करती है।
मनी बैक इंश्योरेंस प्लान पूरे पॉलिसी अवधि के लिए बीमा कवर प्रदान करते हैं और पॉलिसी अवधि के दौरान नियमित लाभ उठाए जा सकते हैं। ये योजनाएं लंबी अवधि के निवेश उपकरणों के रूप में काम करती हैं जो परंपरागत बीमा पॉलिसी की भूमिका को पूरा करने के अलावा स्वस्थ रिटर्न प्रदान करती हैं। आयकर अधिनियम, 1 9 61 के तहत कर लाभ भी प्राप्त किए जा सकते हैं, और म्यूचुअल फंड जैसे समान पेशकशों की तुलना में मनी बैक बीमा योजनाओं को कम जोखिम भरा निवेश विकल्प माना जाता है। नियमित आय और लंबी अवधि की बचत को सक्षम करने के अलावा, मनी बैक बीमा पॉलिसियां यह भी सुनिश्चित करती हैं कि राशि नियमित रूप से वितरित की जाती है। इनमें से कुछ नीतियां ग्राहक को बीमा कवरेज गारंटीकृत मृत्यु लाभों को बढ़ाने की अनुमति देती हैं चाहे परिपक्वता तिथि बीत चुकी है या नहीं, जब तक पॉलिसीधारक 100 वर्ष की आयु प्राप्त नहीं कर लेता है। इसके अलावा, विकलांगों, गंभीर बीमारियों आदि के लिए अतिरिक्त सवारों की उपस्थिति का मतलब है कि आप एक मनी बैक बीमा योजना से अधिकतम लाभ प्राप्त कर सकते हैं।
यदि आप बीमा पॉलिसी खरीदना चाहते हैं और खुद को अच्छे स्वास्थ्य में ढूंढ रहे हैं, तो मनी बैक पॉलिसी अच्छे विकल्प हैं क्योंकि वे कर बचाने में मदद करते हैं और व्यापक जीवन बीमा कवर के अतिरिक्त नियमित रिटर्न प्रदान करते हैं।