Ram, a 22 year old guy has started working as a software tester in MNC. Ram lives a healthy life and he is very excited about his new phase of life. Ram has some dreams regarding his future. At 25, he wants to have a bike and at 28, he wants to be married and at 31, he wants to have a car. Along with this requirement, he also wants an insurance coverage. Ram needs a plan where he can receive money at regular interval of time i.e at age of 25,28 and 31 and coverage too. For such requirement, money back plans comes in picture. Overall,A money back policy is one in which a life assured receives money at specific period of time rather than receiving it on maturity and to be covered with insurance too. Let us see some benefits of buying a money back plan.
- Capital during key stages : Whether you have planned or not,there are important stages of life in which capital is required. This stages can be managed better if you have advance planning. A person takes good decision due to stress free mind and automatically his confidence increases. Now, let us see money back plan with an example, a person buys policy of Sum assured 20 lakh with policy term 20 years. In such case,a person will receive 4 lakh in 5th, 10th and 15th year and 8 lakh at maturity of policy. If he dies in between, he will receive sum assured of policy.
- Short term goals : We all have some goals in our life, ether they are short term or long term.Money back plans are the best plans for achieving short term goals. These goals should be well defined in your mind. Based on that, you have to take Sum assured of a policy.Money back plans are designed in such a way that a policy holder will accomplish target with minimal trouble.
- Less Risk : If compared to various other financial instruments like Mutual funds and shares, it has less risk. An insured is already aware about benefits he will be receiving throughout the policy.
- Relaxation : Along with buying money back plan,you also buy peace of mind. You get relax because of your financial decision which accordingly will help you to plan better for future. A policy holder feels happy and confident when he receives regular income. It also affect your decision making ability due to better management.
- Saving and protection combination : Money back plan is a combination plan which has a dual advantages. It helps to save as well as protect. It means policy holder receives money in frequent intervals and also receives money during unfortunate demise provided the policy should be in-force status. In-force means active status which means policyholder is loyal and responsible toward his policy.
- Riders : A policy holder also has option to increase benefit of policy by opting rider. For opting rider, policy holder has to pay additional premium provided the rider is not in-built rider. There are several riders like Accidental Death benefit,Disability and Waiver of premium. Accidental death benefit comes in pictures when life assured dies due to accident. During such cases, A policyholder gets base as well as rider benefit if accidental rider has been opted . Opting Disability rider can help life assured if unfortunately he gets disabled. Waiver of premium rider benefits by waiving of an insured premium provided the policy remains in-force .Due to certain uncertainty,if an insured becomes disable for certain period of times, Waiver of premium rider comes in picture. It also plays an important role when contract owner dies but life assure of a policy is alive
- Tax saving : There are various ways through which a person can save tax. one such way is buying a life insurance policy. A person who buys life insurance policy gets tax benefit based on his premium. As per Section 80C ,Premium paid by life assured up to 1,50,000 is eligible for tax deduction
Disclaimer :
This article is not sponsored and not meant for endorsing any particular insurance company. Please Check Terms and Condition of respective organization along with inclusion and exclusion before buying insurance policy.