Money Back Policies Are The Best Investment Options: Here's why

• Reduce taxable income by up to Rs. 1,50,000 deduction under section 80C**
• Convenient payment options - annual, half-yearly, quarterly or monthly premium payments
• Do more with plans that offer pure protection, retirement planning and investment options

There is no person who would not want to see their money grow over a period of time. Certainly, you are no different and hence, investments should be a vital part of your financial plans to maximise your wealth. You, as an individual may have many financial dreams you would like to fulfill and hence one of the best options is to invest your savings in various investment tools which can help your money to grow and allow you to fulfill your future goals.

Insurance is also extremely important and it is always advisable to have one since you would not want your family to go through any financial trauma in case you are not around in future.

Understanding Money Back Plans

You may certainly want a product which gives you the best of both worlds. Hence, a money back plan is the best product you can avail for yourself. A money back plan not only provides you cover but also ensures that you get a regular sum of money so that you can take care of your needs.

You can purchase a money back plan for a certain term, and for which you will be required to pay premiums n a regular basis. In case something happens to you, the beneficiary will receive a lump-sum amount called the death benefit. You will also receive a regular sum of money on a regular basis and once your policy attains maturity, you receive the entire sum assured along with the bonus that you might be entitled to. This type of plan also offers rider or add-on plans which adds an extra layer of protection.

Why should you buy a money back plan?

There are various reasons why a money back plan is a brilliant investment option. Some of the reasons are given below:

• Liquidity: This plan provides you liquidity as you receive a regular sum of money. This allows you to plan better and take care of your financial needs, for the present and for the future.
• Risk-free in nature: There are other types of products such as ULIPs which invest your money in various market instruments. Investing in products like ULIPs can be a bit risky in nature since they pool your money in stocks and equity. If you don’t want such risks, then purchasing a money back plan will be beneficial for you.
• Survival benefits: Under a money back plan, a part of your sum assured is paid to you on a regular basis. If you survive the term, you would be then eligible to receive the maturity benefits along with the bonuses that you might be qualified for.
• Insurance coverage: Money back plans provide you with the best of both worlds as they are an insurance cum investment product. In case something happens to you, the nominee will receive the sum assured regardless of the regular payout you have been receiving periodically. A money back plan not only allows you to grow your money and receive a regular income so as to take care of your needs but also protects your family financially in case you are not around in future.
• Bonus: An insurance company may offer a bonus to you in case it makes a profit. This can be counted as an additional benefit that you may receive and thus it is always advisable to purchase a money back plan from a reputed insurance company.
• Tax benefits: Along with other benefits such as the death benefit which your nominee is entitled to in case of your sudden death, and the maturity benefit which you get in case you survive the term, you are also eligible to receive tax benefits under Section 80C of the Income Tax Act,1961.

If you are someone who is looking for a product which provides insurance cover and also helps you build a corpus, then it is highly recommended that you purchase a money back plan for yourself. You will come across products like ULIPs, endowment plans, etc., which not only provide cover but also allow you to maximise your savings. However, these products are slightly different from a money back plan. ULIPs carry a certain degree of risk since they invests your money in various market instruments. Endowment plans, unlike money back plans, do not provide a regular payout to their investors. So, if you are someone who has no appetite for risks and wants a regular income credited to their account, a money back plan is the most suitable option for you.

You must be sure about your financial goals and have an idea regarding the total amount of funds you would like to invest. You must also be sure about the period for which you would like to keep investing and also the payouts you would like to receive. If you are clear regarding all these factors then you can surely go ahead and purchase a money back plan for yourself.