Read about information on Money back life
insurance policy in India.
Money Back Policy, India
Money back policy provides for periodic payments of
partial survival benefits during the term of the policy, as long as the
policyholder is alive. They differ from endowment policy in the sense
that in endowment policy survival benefits are payable only at the end
of the endowment period.
An important feature of money back policies is that in the event of
death at any time within the policy term, the death claim comprises full
sum assured without deducting any of the survival benefit amounts, which
may have already been paid as money-back components. The bonus is also
calculated on the full sum assured.
Money back life insurance policies are very popular among traditional
investors who seek financial instruments that provide insurance and
investment, with a low risk element and guaranteed returns. This type of
policy is perfect for individuals who are in their late 30s or early 40s
and are looking at significant payouts after 10-15 years to fund their
children's higher education, marriage and other expenses. Money back
policies create a long-term savings opportunity with a reasonable rate
of return, especially since the payout is considered exempt from tax
except under specified situations. One negative aspect of money back
policies is that they have higher premium as compared to other insurance
polices.
Things to Consider Before Buying Money Back Policy
- Before buying a money back plan,it is advisable to read the terms
and conditions thoroughly. You should carefully check out the actual
amount allocated towards the premium, how much of it is going to be
accumulated and how much is the insurance company's charges.
- Make sure that the periodic payouts are sound enough to meet your
anticipated needs. You can analyse the past performance in terms of
declared bonuses. Though the past is not necessarily an indication
of future performance, it gives a fair idea of the insurance
company's commitment to its policy holders.
