What is Money Back Insurance Policy?Money Back Insurance Policy is different from endowment plan as the policyholder gets a fixed sum at particular intervals during the policy period.
Example: Shawn opts for 25-year long insurance. He has to pay monthly premiums for 25 years. He will receive a guaranteed lump sum amount from the total sum assured during this tenure. Shawn will receive a 5% of the sum assured or insurance coverage after every 5 years.
That means after 5 years he will receive his first lump sum amount then after 10 years and then once after completing 15 and 20 years, respectively. At the end of the policy duration, i.e. after 25 years, he will receive the rest of the amount. Hence, during the tenure he is eligible to receive 20% of the total amount and the rest 80% will be paid after the maturation of the policy.
What are the benefits for the nominee?If you are wondering whether Money Back policy will serve as insurance for your nominees, then the answer is yes! Your nominees will get the sum assured in the event of your death. However, the amount paid to your nominees is never fixed and is calculated based on the premiums paid.
Example: If Lena has opted for 25 years of insurance coverage and she passes away in the 17th year then the sum paid to her nominee is calculated based on the premiums accrued for 17 years.
What is the extent of coverage provided by the Money Back plan?Money Back plans guarantees financial help to your nominees in the event of your death. ssHowever, you can also avail additional benefits such as cover for critical illnesses and accidental disability by increasing your premium amount.
With Money Back policy you wouldn’t have to spread your income across different instruments for investment and insurance as you can do both with one policy.
Learn more about different OnlineTerm Insurance Plans here.
The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.
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