Money back plan is a type of life insurance policy. It is a part of endowment plans. It returns a fixed amount of premium after regular intervals as per the insurance policy agreement. The name money back plan indicates the meaning that money comes back to the policyholder at regular intervals. If the policyholder dies during this plan, the lump sum amount will be paid to the nominee and the plan will get terminated after that.
It is a fixed type return plan and gives the lower return as compared to other insurance policies which are risky. In this policy, the insurer will get benefits in terms of installments rather than get the whole amount at the end of the policy period. These types of benefits are termed as survival benefits.
Benefits of Money Back Plan:
- Get fixed amount of returns
- Get money benefits after regular intervals
- In case of death of the insurer, get the lump sum amount
- Money back plan is useful to cover specific expense
Go through below-mentioned example to get clarity:
Rakesh Gupta is working a Sales Manager in Delhi. He has availed money back insurance policy of 8 lakhs for 20 years. He will pay a premium for 20 years. As per this plan, he would get back 10% of the total amount after the 3rd, 6th, 9th, 12th, and 15th year of the plan. Therefore, he will get 10*5 = 50% of the amount as these regular benefits. On the completion of the policy after 20 years, he will get rest of the 50% amount assured.