What is a Money Back Insurance policy?
A traditional insurance plan pays out a lump Sum Assured in the event of the death of the life insured. The beneficiaries/dependants/nominees of the life insured receive a benefit (called a death benefit) if the worst should come to pass for the insurance holder.
A money-back insurance plan pays out the same maturity benefits in the form of several guaranteed “survival benefits” which are staggered evenly throughout the course of the policy. So, a money-back insurance policy is an endowment plan with the benefit of regular liquidity.
Money-Back Life Insurance Benefits:
Provides insurance cover during the policy term.
Pays out regular benefits throughout the term.
Works as an insurance policy as well as a long-term investment with good returns.
Provides tax benefits.
Less risky than other investments offering similar returns like mutual funds.
Enables long-term savings and regular income.
Ensures that amounts are disbursed regularly.
Some plans extend the insurance coverage guaranteed death benefits even after the maturity date and the last survival period, up to when the life insured attains the age of 100.
There are optional riders that cover things like specific illnesses, critical illnesses, disabilities, etc.
How to Choose a Money Back Policy:
Choosing the right money back policy is key to ensuring individuals receive the maximum benefits from a particular policy. When choosing a money-back plan, individuals should look at the policy tenure. The average tenure for a money-back policy is around 20 years. We have also given our recommendations which also please review.
As money-back policies pay policyholders a Survival Benefit, prospective policyholders should ascertain the percentage of the Sum Assured that will be paid out in installments. The amount should be enough to cover any expenses the policyholder might have.
The type of investments available through the investment component of the policy should be looked over. Policyholders should also verify the duration of the pay-outs being made over the course of the policy term as Survival Benefits. Some plans pay policyholders every 5 years, others have a different timeline depending on the policy tenure.
Policyholders should also check to see if the money-back policy offers tax benefits. Some plans do not offer a tax benefit if 20% of the Sum Assured is being provided as Survival Benefit.
Popular Money Back Plans by Insurers:
LIC Money Back With Profit
LIC Money Back Plan 20 Years
LIC Bima Bachat
HDFC Life Super Income Plan SBI Life – Smart Money Back Gold
Birla Sun Life Insurance Bachat Money Back Plan
Reliance Super Money Back Plan
Kotak Life’s Unique Money Back Plan
Our Recommendation – KOTAK LIFE has launched its most unique and first time in the industry a UNIQUE MONEY-BACK PLAN exclusively for children.
How the UNIQUE MONEYBACK PLAN is STRONGER than USUAL MONEYBACK plan in the industry?
|Usual Money back Plan||Unique Money back Plan|
|1||Get Money back every 5 years.||Get Money back every year from 2nd year onwards.|
|2||Get 25% Cashback from 5th Year interval||Get 30% Cashback from 2nd year onwards every year|
|3||Benefits gets over in 20 years||Covers till 75 years of your life.|
|4||Maturity Benefit is Bal SA + Terminal Bonus||Maturity Benefit of 69.87 lacs.|
|5||Future Premiums may or may not be waived off for your Child in case of death||In case of death of the Premium Payer, all future premiums are waived off and benefits continue for your child.|
The following are 5 unique benefits OF Kotak Life’s UNIQUE MONEY-BACK PLAN.
Get money back every year for 70 years of your life
Take 30% of the annual premium every year from the second year onwards.
Pay – 11 Lacs and get total benefits of more than 94 Lacs – Total Tax-Free
Avail tax benefit of 80C and 10(10((D)).
In case of death of the premium payer – all the future premiums are waived off and all benefits will be given to your child – Guaranteed.
There is more to it with the KotakLife feature of UNFAIR TRADING ADVANTAGE compared to any other investment.
Min 10 times of Insurance cover.
Benefit of WAIVER OF PREMIUM in case of death of Premium Payer.
Tax benefit US 80C and 10(10((D)) [Under section 80C, premiums that you pay towards a life insurance policy qualify for a deduction up to ₹1.5 lakh, while Section 10(10D) makes income on maturity tax-free if the premium is not more than 10% of the sum assured or the sum assured is at least 10 times the premium.]
EEE benefit – Benefit on Premiums Paid, on Bonus and Maturity.
Highest liquidity – Money back from the second year.
Money Back Policy FAQ’s
- Is the amount received through a money-back policy taxable?
If the premium paid is more than 10% of the Sum Assured for policies purchased after April 1st, 2012, the amount received is taxable.
- Is there a penalty if I do not pay my premium for my money back policy on time?
If the premium amount is not paid within the grace period allotted for the same, the policy lapses and benefits associated with the policy cease. If the premiums have been paid for a minimum of 3 years, a paid-up value for a reduced sum is created.
- Can I revive a money-back policy?
Money-back policies can be revived within 2 years from the date the last premium was paid.
- Can I transfer my money back policy?
As of now, it is not possible to transfer a money-back policy. The policy can be surrendered if desired.
- How do I surrender my money back policy?
A money-back policy can be surrendered on its attaining cash value (after payment of 3 years’ worth of premiums). The policy will have a surrender value based on the policy tenure and the number of premiums paid.
For the NRI Sector or Non-Resident Indians (NRIs), People of Indian Origin (PIOs)
Q. Can NRI buy life insurance in India?
Yes; Non-Resident Indians (NRIs), People of Indian Origin (PIOs) can buy a life insurance plan in India. Foreign Exchange Management Act (FEMA) allows NRIs to buy any plan that meets their requirements of protecting themselves and their family whether he is currently residing in India or not.
No matter how far you go, home is always where the heart is. That’s often the case with many NRIs who have left a piece of themselves behind in India. India is one of the world’s largest recipient of international remittances. This clearly indicates that most NRIs are still deeply connected to their roots.
Moreover, it’s an opportune time to invest in India – we have a strong and stable majority government, a lot of foreign investment is flowing into the country and the world has its eyes set on the Indian market due to its immense scope for growth.
Q. What are the required documents?
Apart from normal KYC documents, we need
👉Work Permit/Valid Visa
👉Latest immigration Stamp- Last India Entry and Exit in the passport
👉Foreign Address proof
👉Income proof life Salary Slips or Bank statement.
To get a customized plan and understand which is the best plan for you feel free to write to us in the comment section or click here to fill the contact form or simply email us at email@example.com.