The insurance sphere in India has changed dramatically from what it used to be years ago. Gone are the days when policies had limited benefits and pay-out options. Today, insurance companies in India are innovating in the insurance arena to provide interactive solutions to customers' ever-changing needs.
Rightly recognising the need for customers to get protection from insurance but also returns on the money they pay for premiums, premier insurers in India devised an excellent product known as the 'money back policy'. It is an instrument by which the premiums paid are returned to the customer with a high sum assured once the policy matures. Thus, the policy holder can time the policy maturity date with such milestones as children's future education, retirement, medical expenses, etc.
The best money back policies to consider
When buying a money back policy, it is important to scout for some essential features, such as:
You can browse for the best money back policies online and compare features and benefits before making a decision. Look for insurance providers with a solid reputation, a good track record and a high claims settlement ratio.
- The plan must be a non-participating endowment policy which offers guaranteed protection, capital appreciation and safety.
- The maturity benefit must be computed basis your age at the time of plan maturity and the policy tenure, and it must be higher than base premiums paid.
- The plan must increase its existing cover every policy anniversary year by an amount equalling the annual base premium. Hence, your coverage amount increases every year.
- The plan must allow you to pay the premiums in periodicity that is convenient to you: monthly, quarterly, half-yearly or yearly.
- The policy must let you earn a survival benefit every year from the third year onwards.
How does a money back policy help?
A money back policy helps by paying you a regular income after a certain period in the policy tenure has elapsed. This income supplements your regular income and can be set aside as savings or expenses related to the home, children's education, retirement planning, emergency medical expenses fund, etc. The survival benefit is normally calculated up to 80% to 90% of the paid premiums.
Since there are survival, maturity and death benefits, the policy holder and his family members are well cared for in times of financial uncertainty, and the corpus also helps to fulfil the family's dreams. The supplemental income comes in handy at regular intervals, and it is an important consideration for single-income families.