A money back insurance policy is a type of life insurance where you get a part of the assured amount regularly instead of all at once at the end. It's like an endowment plan but gives you periodic payments, providing liquidity. It is different compared to the term insurance plan, which primarily focuses on providing financial protection to the insured's beneficiaries in case of untimely death for a specified period.
For some people, a money back policy is considered one of the best saving schemes, as it combines life insurance with savings, catering to both protection needs and financial security.
Policyholder: John Doe
Age: 35 years
Policy Term: 20 years
Sum Assured: ₹10,00,000
Annual Premium: ₹50,000
With this scenario, every 5 years (at 5th, 10th, and 15th years), John receives ₹1,50,000 (15% of ₹10,00,000) as survival benefits. For the Maturity Benefit, at the end of 20 years if John is alive, he gets ₹10,00,000 as a lump sum.
Death Benefit: If John passes away during the policy term, his beneficiaries receive ₹10,00,000. For the Insurance Coverage, John is insured for ₹10,00,000 throughout the 20-year term.
Money Back Policy has several beneficial features, including:
As one of the best saving schemes, this plan is great for people seeking a safe investment regardless of market conditions. Money is returned to the policyholder as survival benefits or to the nominee in case of the policyholder's early demise.
A money back plan ensures guaranteed returns throughout its lifespan. Survival benefits are paid regularly every few years, covering unforeseen large expenses or for family holidays, loan payments, buying a home, or savings.
At maturity, the policyholder receives a lump sum amount, which is guaranteed and disclosed upfront, providing a definite return and sum assured.
If the policyholder passes away during the policy term, the nominee receives the sum assured along with applicable bonuses, ensuring financial security for family members.
The policy includes annual bonuses declared as a percentage of the sum assured, enhancing the maturity amount. Timely premium payments are essential for receiving these bonuses.
Policyholders can opt for add-on riders like critical illness, personal accident, or term rider to enhance their coverage by paying a higher premium. Experts recommend a money back plan for assured returns, comprehensive add-ons, lower risk, and tax benefits.
One of the benefits of a money back plan is that it pays out returns every few years, even for long policy terms like 15 to 20 years. These payments are called survival benefits and occur at specified intervals.
A money back policy offers good value because it provides money in three ways: survival benefits paid regularly, the full sum assured at maturity, and additional bonuses. This is more beneficial than receiving a lump sum only at maturity.
Policyholders always receive the full sum assured at maturity, regardless of the survival benefits already received. They also get an extra bonus, increasing the total payout.
Unlike many investment plans that only pay at the end of the term, a money back policy offers insurance cover throughout and returns through survival benefits, maturity benefits with bonuses, and overall coverage.
Money back plans offer two types of bonuses: Simple Reversionary Bonus declared yearly and added to the final payout, and Compound Reversionary Bonus, which instantly increases the sum assured for future calculations.
Read more: Types of Bonuses in Life Insurance
Including a money back policy in your investment portfolio provides stability against market volatility seen in stocks or commodities. Its guaranteed returns help mitigate losses from other investments.
A money back plan ensures the policyholder gets their sum assured regardless of market conditions, making it a secure investment. Survival benefits can also provide funds when needed.
Premiums paid towards a money back plan qualify for tax deductions under section 80C of the Indian Income Tax Act, subject to certain limits. Additionally, if the sum assured is at least five times the premium, it is exempt from tax deductions at source.
In addition to the advantages, Money Back Policy also has several benefits, such as survival benefits, death benefits, and maturity benefits.
Many people confuse a Money Back Policy with a pure investment option such as best Term Insurance Plan, when in fact, they have distinctive differences in basic features, premiums, maturity benefits, and returns. Check out the comparison here.
For more information about the Money Back Policy and other Life insurance plans offered by PNB MetLife, you can leave your details below. Our dedicated consultant will then give you a call to assist you in finding the best saving scheme and insurance plan for your needs.
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Piyush Kataria, SEO Manager at PNB MetLife, is a seasoned digital marketing strategist with over a decade of experience in optimizing websites for search engines. His expertise extends to keyword research, content strategy, technical SEO, and link building, all of which have been instrumental in driving organic traffic growth at PNB MetLife. With a strong foundation in life insurance, Piyush leverages his industry knowledge to create targeted and effective SEO campaigns.
Sakshi Malhotra is a seasoned marketing professional associated with the Life Insurance industry since 2007. At PNB MetLife, she heads Digital Marketing and Direct to Customer line of business. She is responsible for driving effective customer engagement through the company’s website and social media channels. In addition, she drives customer online buying journeys to help them buy the right product.
The aforesaid article presents the view of an independent writer who is an expert on financial and insurance matters. PNB MetLife India Insurance Co. Ltd. doesn’t influence or support views of the writer of the article in any way. The article is informative in nature and PNB MetLife and/ or the writer of the article shall not be responsible for any direct/ indirect loss or liability or medical complications incurred by the reader for taking any decisions based on the contents and information given in article. Please consult your financial advisor/ insurance advisor/ health advisor before making any decision.
PNB MetLife India Insurance Company Limited
Registered office address: Unit No. 701, 702 & 703, 7th Floor, West Wing, Raheja Towers, 26/27 M G Road, Bangalore -560001, Karnataka
IRDAI Registration number 117 | CIN U66010KA2001PLC028883
For more details on risk factors, please read the sales brochure and the terms and conditions of the policy, carefully before concluding the sale.
Tax benefits are as per the Income Tax Act, 1961, & are subject to amendments made thereto from time to time. Please consult your tax consultant for more details.
Goods and Services Tax (GST) shall be levied as per prevailing tax laws which are subject to change from time to time.
The marks "PNB" and "MetLife" are registered trademarks of Punjab National Bank and Metropolitan Life Insurance Company, respectively. PNB MetLife India Insurance Company Limited is a licensed user of these marks.
Call us Toll-free at 1-800-425-6969, Phone: 080-66006969, Website: www.pnbmetlife.com, Email: indiaservice@pnbmetlife.co.in or Write to us: 1st Floor, Techniplex -1, Techniplex Complex, Off Veer Savarkar Flyover, Goregaon (West), Mumbai – 400062, Maharashtra. Phone: +91-22-41790000, Fax: +91-22-41790203.
| Beware of Spurious Phone Calls and Fictitious / Fraudulent Offers! IRDAI or its officials is not involved in activities like selling insurance policies, announcing bonus or investments of premium. Public receiving such phone calls are requested to lodge a police complaint. |
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