One always likes the idea of insurance with an investment benefit. If one’s focus is survival and survival benefits then a money back policy is the answer. If one wants income obtained at regular time intervals along with an insurance cover then money back is the keyword. Money is always in short supply especially at the time one needs it the most. This is invariably at the time when life’s goals beckon. Perhaps it’s time to buy that brand new car. One’s son wants to do an MBA or one’s daughter’s marriage is at hand. One can certainly turn to a money back insurance policy to achieve one’s dreams.
What is a money back policy?
A money back policy is a traditional life insurance plan where the policy holder is insured for a particular amount called the sum assured on payment of a premium. A percentage of the sum assured is received at pre decided time intervals. This is unlike a regular endowment plan where the sum assured known as the survival benefit is paid out at the end of the tenure of the policy. Policy term is the tenure of the insurance policy and is the time period for which the person is insured. Premium term is the time period for which the policy holder has to pay the premium. The sum assured depends on the premium amounts paid. In addition a policy carries an assured bonus paid out at regular intervals or at the end of the policy term in a participating policy. The bonus is calculated on the full sum assured. An accidental rider or a critical illness rider is available on payment of an additional premium.In case of the death of the policy holder the nominee gets the entire sum assured and the survival benefits earned during the previous terms as money back components when the policy holder was alive are not deducted.
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