5 Top Benefits of Money Back Insurance Policies in India 2021
Sunil Kumar, an advertising professional, was on the lookout to buy an appropriate insurance policy for himself as he doesn’t have one, though he is 30 years of age. Although he wanted a term plan with a high sum assured plan, he didn’t like that a term policy would not pay anything on survival. So he chose a money-back plan for a sum assured of Rs 10 lakhs for a tenure of 25 years. The policy assured to pay 20% of the basic sum assured as survival benefits at the end of 5th, 10th & 15th policy year. The remaining 40% shall be paid along with a reversionary bonus if he survives the entire policy term. Even though the premium was higher than a term insurance plan, Sunil liked the concept of payouts, feeling the amount he pays is returned to him periodically.
Investing in the right products is the key to building wealth over the longer term. At the same time, making arrangements for a safe financial future for your family is also necessary. While the former requires savings, the latter is taken care of by insurance. Money-back policies are those which combine the goal of savings and insurance into one single product. A money-back plan is a type of term insurance that assures death benefit if the policyholder encounters any unfortunate event such as death, accident, disability, etc., and assures to return the premiums paid in regular intervals on surviving the policy term.
5 Top benefits of money back policies in India in 2021
The biggest benefit of the money-back term plan is the flexibility it offers in getting back the amount paid as premiums. But there are more advantages to these policies compared to other insurance plans, which are listed below:
1. Regular Income
The survival benefits paid by the insurer at regular intervals will help you meet any short-term goals. If you have any educational or home loans, you may close them faster by using these payouts that are received at the end of specific pre-defined periods. Some choose to invest in the best money-back policy for 5 years that helps them streamline their finances without compromising on the future cash flow, striking two goals simultaneously. This facility is not available in term plans, which is a major advantage for those who purchase these policies.
2. Insurance Coverage
Since the money-back life insurance plans provide insurance coverage, you can be assured of life insurance cover in the event of any unfortunate incident happening to you. Money-back plans offer up to 125% of the sum assured as the death benefit if the policyholder encounters death during the policy term. It ensures your family members do not have to suffer financially, allowing them to pursue their goals without any trouble, even if you are not around them for a longer period.
3. Rider Benefits
Even if this is a money-back plan, it still offers the features of a term insurance plan, one among them being the ability to add riders. These riders are add-ons that are primarily attached to an insurance policy to extend its functionality and provide better coverage against specific risks of life such as accidents, disability, critical illness, terminal illness, etc.
4. Less Risk
Unlike other investment opportunities such as stock markets, mutual funds, or gold, money-back term insurance plans are a lot less risky when it comes to the returns generated. Also, the volatility is next to none, with the return of money back to you in regular intervals, ensuring your capital is safe and providing you with the comfort of life security in the form of insurance coverage.
5. Income Tax Benefits
The premiums that you pay towards money-back policies are eligible for income tax deductions and exemptions under sections 80C and 10(10D) of the Income Tax Act, 1961, respectively. So you are eligible for tax-exempt income while enjoying the privileges of staying insured for a longer period. In addition, in the hands of the beneficiary, the death benefit amount that is payable to the nominee on the demise of the policyholder is tax-exempt. It simply means that your family members don’t have to pay income tax on the death benefit value received from the insurer if you are dead during the policy term.
8 Best Money-Back Insurance Policies in India in 2021
Many insurance companies in India offer money-back insurance plans, and choosing one from the list could become difficult. Hence, we are listing some of the best money-back plans available in the market, along with their eligibility and features, that will help you choose the right one.
|Plan Name||Entry Age (Min/ Max) in years||Policy Tenure in years||Sum assured (minimum)||Claim Settlement Ratio (CSR)|
|HDFC Life Super Income Plan||18 – 59||5, 8, 10, 12 years||₹ 75,000||99.07%|
|SBI Life Money Back Gold||18 – 65||12, 20, 25 years||₹ 75,000||94.52%|
|ICICI Prudential Assured Savings Insurance Plan||8 – 60||10,12,15 years||subject to premium||97.84%|
|Bajaj Allianz Cash Assure||18 – 70||16,20,24, 28 years||₹ 1 lakhs||98.02%|
|Canara HSBC OBC Smart Stage Money Back plan||8 – 55 years||15 years||₹ 1 lakhs||98.12%|
|Kotak Premier Money Back Plan||2 – 57||16,20,24 years||₹ 1.5 lakhs||96.38%|
|Aegon Life Regular Money Back Insurance Plan||7 days – 75 years||20||subject to policy||98.01%|
|LIC Money Back Policy-20 years||13 – 50||20||₹ 1 lakhs||96.69%|
Buying an insurance policy might seem simple, but you need to plan your future requirements as well as your family’s safety when you are not around them. From that point of view, a money-back plan is a right choice for those looking at a risk-free regular income during their survival while being assured of death benefit receivable on their demise.