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7 Benefits of Money Back Insurance

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blog image April 20, 2022

7 Benefits of Money Back Insurance

If you already have an insurance policy, you would know that the premiums that you pay every month are not refundable. Unless you’re a holder of whole life insurance or a universal insurance policy, then there is a cash component where if you pay extra on the premium, that extra part would be saved and you can withdraw at any time. With standard life insurance policies, the premium amount goes to the company. Now, this can be disheartening, aftercall it’s your hard-earned money and if haven’t used your insurance claim many times, then you would like it back. Well, money back insurance does that exact thing for you. And in this blog, we discuss the many benefits of a money-back insurance policy, seven of them to be more precise.

Understanding what money-back insurance is

Although the name is self-explanatory, the policy is much more than what you think it is. Yes, with money-back insurance, you do get a percentage of your sum assured during the lifetime of the plan. What’s the percentage? It is calculated on the total sum that has been assured by the policy at the end of its maturity period. In the unfortunate scenario of you or the policyholder passing away, the family members will be receiving the complete sum at the end of the maturity period and the monthly percentage amount will not be deducted. You should know here that the sum assured paid and the percentage amount is not fixed and it varies from plan to plan. Additionally, you should know that the premium rates will be unique to the applicant.

 

7 advantages of money-back insurance

  1. Refund on premiums: If the policyholder survives the entire term, then a refund on the premiums made will be done, however, it will be subjected to tax
  2. Savings vehicle: This insurance policy can be treated as a savings vehicle. While with money-back insurance, you may be spending a bit more on premiums, you should remember that a couple of years down the lane when the policy matures, you will get your money back.
  3. Affordable: When you look at its counterparts, money-back insurance is less costly compared to whole life insurance and even universal insurance. So if you’re looking for an inexpensive savings vehicle in the form of an insurance policy, then this might be ideal for you.
  4. Low-risk: Market volatility affects bonds, mutual funds, stocks, equities and other investment vehicles. This scheme can guarantee a person’s returns at certain intervals. If you want to keep your risk appetite low, it might be a suitable alternative for you because of the insurance coverage and constant revenue of this policy.
  5. Waiver for premium riders: If the policyholder passes away due to an unforeseen event then the remaining premiums are waived. The family member of the policyholder will not have to worry about additional expenses during an emotionally difficult time.
  6. Growth of funds: There is no limit to the growth of the premium amount.
  7. Tailored contract: You can customize the policy depending on your financial requirements.

Conclusion

The major feature of a money-back insurance policy is that it offers liquidity in the form of regular payouts throughout the policy’s lifetime. Maturity benefit is paid at the maturity of the plan and it also offers life coverage, as well as death benefits, which are paid in full to the nominee in case of demise of the policyholder. This is irrespective of the survival benefits already received.

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