Money-back life insurance policies are savings-oriented plans that provide both life cover and periodic payouts during the policy term. They combine protection with guaranteed returns, unlike term insurance which only offers pure risk cover. A type of life insurance plan that offers regular payouts (survival benefits) at fixed intervals during the policy term, plus a lump sum at maturity, and a death benefit if the insured passes away. Provides insurance coverage + savings/investment returns. Guaranteed Returns- Payouts are predetermined and not market-linked.
Key Features
- Survival Benefits: A percentage of the sum assured is paid back at regular intervals (e.g., every 5 years).
- Maturity Benefit: At the end of the policy term, the remaining sum assured plus bonuses is paid.
- Death Benefit: If the policyholder dies during the term, the full sum assured is paid to beneficiaries, regardless of prior payouts.
- Premiums: Higher than term insurance due to savings component.
- Tax Benefits: Premiums and payouts may qualify for tax exemptions under local laws.
Who Should Consider It?
- Conservative Investors: Those who prefer guaranteed returns over market risk.
- Families with Milestones: Useful for planned expenses at different life stages.
- Individuals Seeking Discipline: Ensures forced savings with insurance protection.
Money-back policies are best if you want insurance plus guaranteed periodic returns, but they are costlier and less efficient than pure term insurance for protection. They suit people who value liquidity and predictable payouts over maximizing returns.