5 Pros of Money Back Policy That Will Tempt You to Buy One for Yourself

Money back policy is a well-liked investment choice in India, especially for people seeking both life insurance protection and savings advantages. By disbursing a certain fraction of the sum insured at predetermined intervals over the course of the policy period, the insurance is designed to ensure a return on investment.

Let us look more closely at the five benefits of money back policy guarantees that can persuade you to get one for yourself.

1. Assurance of Returns

One of the main benefits is that money back policy provides guaranteed returns. This means that, regardless of changes in the market or the state of the economy, the policyholder will receive a specified sum of money at predetermined intervals throughout the policy period.

A money-back benefit is usually provided as a percentage of the sum insured. It can be utilized for a variety of financial goals, including paying for children’s education costs, wedding costs, or any other long-term economic aim.

Read: How to Get the Best Life Insurance Rate in 7 Easy Steps

2. Life Insurance

Money back policy also gives the policyholder life insurance, which is a significant benefit. In addition, the nominee receives a lump sum payment in the tragic case of the policyholder’s passing during the policy term, which can aid in giving the family financial security and stability.

The death benefit payment is often more significant than the sum promised and can significantly help the family’s financial requirements.

3. Liquidity

Money back policies give policyholders flexibility because they can cancel the coverage and get the surrender value, which is the sum paid by the insurance provider in the event of cancellation before the end of the policy’s term.

In the event of any unanticipated financial difficulties or if the policyholder requires money for a specific purpose, this provision may be helpful.

Additionally, some money-back policies allow you to borrow money against the insurance, which might be a valuable benefit if you ever have an emergency need for money.

4. Flexibility

Money back policies are flexible regarding payment alternatives, policy terms, and amounts assured. According to their own needs and preferences, policyholders can choose the frequency of payments, the length of the policy, and the amount insured.

Some policies also allow the policyholder to add riders, such as critical sickness, accidental death, or disability riders, which can add further coverage for a small fee.

Also See: Why it is Important to Choose a Well-Suited Insurance Policy for Parents?

5. Tax Benefits

Money-back insurance has many tax advantages, which is a big plus. Policyholders can deduct up to Rs. 1.5 lakh per year from the premium they pay under Section 80C of the Income Tax Act, which results in significant tax savings.

Money-back policies are a desirable investment choice for people wishing to reduce their tax burden while purchasing life insurance due to these tax advantages.

Bottom Line – Pros of Money Back Policy

Money-back policies are an excellent choice for investors seeking assured returns, life insurance, tax advantages, liquidity, and flexibility. With so many advantages, it is understandable why they are rising in popularity in India.

However, before choosing a policy, you should conduct your homework and examine several options. Before purchasing a money-back policy, you should also take into account variables like the premium cost, length of the policy, and the standing of the insurance provider.

In general, a money-back policy is a fantastic choice for consumers seeking both savings potential and life insurance advantages. The fact that the policy offers guaranteed profits, life insurance coverage, tax advantages, liquidity, and flexibility makes it an appealing investment choice for a lot of people. This kind of policy may be appropriate for you by being aware of the features and advantages of money-back plans.