Meet the industry leaders who will comprise the judging panel for this prestigious industry award
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Tuesday, August 9, 2022
OIP announces senior leadership changes
Moves support company's "tremendous growth trajectory," founder says
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Insurance Business reveals top insurance employers in US for 2022
Companies evaluated on benefits, compensation, culture, and other metrics
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Revealed – what percentage of P&C premiums is placed by independent agents?
Almost all P&C lines have been seeing steady growth in the channel in recent years
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Munich Re delivers "resilient" Q2 results
Profits take a hit but annual target remains unchanged
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Argo Group delivers losses in interim results
Negative figures downplayed as chief highlights "focussed approach to profitable growth"
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Money-Back Policy: All You Need to Know About a Money-Back Plan
Money Back Policy
If you are willing to invest in a money back policy, you are up for dual benefits of savings and insurance. Read on to know the money back policy meaning and all the interesting aspects of the policy in this post.
The best thing about a money back plan is that it pays out the entire sum insured to the policy holder evenly all through the policy duration as long as the insured person is alive. So, the sum assured is dispersed as a survival benefit to the policyholder after a particular period of the policy initiation. This regular payout as survival benefit goes on till the policy matures if the policyholder is alive. You can use the money back policy calculator to calculate how much payout you will receive and at what duration.
However, if the policyholder dies before the maturity of the policy, the nominee will continue to receive the payouts and later will also receive the entire sum assured along with bonuses (if any).
What is a Money Back Policy? and How a MB Policy Work?
Let us understand what is money back policy and the way it functions with the help of a simple example:
Let’s assume that you bought a money back policy at the age of 23 when you got your first job. In the fifth year of your policy, you receive the first survival benefit at the age of 28. You used that money to buy your first car. You received the second survival benefit payment at the age of 33 on the completion of 10 years of the money back policy. You used that money to pay off your father’s loan that he had taken during marriage to take care of the expenses. The third payout is offered on the 15th year of the policy when you have turned 38. You helped your husband with clearing the home loan with that lump sum amount. And the final payout is offered by the policy provider on the completion of the 20 years of the policy when you turned 43. You used that money along with the rest of the sum assured and bonus amount to start your own business or to meet your child’s higher education aspirations.
With the above example we hope you now know how best money back policy works and how and when you get the payout in such a policy.
Now, let us understand the features of a money back policy.
Features of Money Back Policy –
- Guaranteed income throughout the policy period – As the name suggests, the money back insurance policy offers capital as survival benefit which is paid every so often to facilitate the insured to pay for the numerous life goals like education/home loans, debts, higher education requirements, and so on. This coverage helps to strengthen your financial security further.
- Dual components of Investment and Insurance – The double benefits of maturity and liquidity makes the money back policy act as the best plan of insurance and investment.
- Benefit received at death – Money-back policy pays the survival benefit all through the policy period. However, it also pays death benefit to the beneficiary of the insured in lump sum if the policyholder dies before reaching the maturity of the policy.
- Benefits of Riders – Money-back policy provides add-on benefits of riders including the rider of accidental death as well as critical illness.
- Tax deductions – Money-back policy allows the insured to enjoy tax benefits as the plan is exempted from taxes.
Benefits of Money Back Policy –
Here are some of the benefits offered by money-back policy:
- The policy protects your life with life insurance during the term of the policy
- It offers payments periodically as survival benefit all through the term of the policy
- Money-back policy acts as both insurance plan along with serving the purpose of investment for long-term with high returns
- The policy offers tax benefits
- Money back is low in terms of risk as compared to many other investments
- It facilitates savings in the long-run and regularizes income
- It also ensures regular disbursal of funds
- It allows the benefit of procuring optional riders to cover specific illnesses and disabilities
Also Read: Can I Get My Insurance Premium Back Under A Money Back Plan?
To Conclude
The benefits offered with money back policy despite being a low-risk plan is enormous. And this makes it the best choice for people who are reluctant to take risks but who want to enjoy the perks of regular income and maturity benefit. Further, you also get a survival benefit with your best money back policy after every 5 years.
However, a policy seeker should keep note of all the features and understand all the terms and conditions of the policy carefully before buying a money back policy to serve their financial needs.
Found this post informational? Browse PayBima Blogs to read interesting posts related to Health Insurance, Car Insurance, Bike Insurance, Term Life Insurance and Investment section. You can visit PayBima to Buy Insurance Online.
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How You Can Plan Your Retirement With Life Insurance?
Planning Retirement With a Life Insurance Policy
Planning for retirement is important. But if you fail to do so due to financial constraints, you can use your life insurance plan as your retirement security. Want to know how? Read the post below.
Among the many investment options available, life insurance is a plan that allows the investor or the insured people to enjoy the dual benefits of saving for long-term as well as the security of insurance. However, to gain from the long-term investment, it is important for a person to invest carefully. Retirement and pension plans are crafted particularly to benefit individuals with their needs post retirement. So, if you are looking for a cost-efficient retirement investment option you can purchase a reasonably priced life insurance plan that suits your budget. It will work both as a savings plan as well as offer you enough capital during your retirement. This plan will also aid you in saving significant money on premiums, which can be used to invest in other financial opportunities to create extra returns.
Further, since most of the high-return investment plans pose substantial risks. Hence, the best thing is to buy a suitable life insurance policy to start your retirement saving plans.
In this post, we are talking about the various kinds of life insurance policies that you may consider for your retirement planning.
But before that let us give you a brief understanding on what is life insurance or the life insurance meaning, especially to enlighten the people who are new to the subject.
Life insurance is a plan to insure your life where you as the policyholder pay a particular premium annually to the insurance company from which you buy the plan. In return, the insurer promises a sum of money offered to the nominee of the insured if he/she dies during the term of the policy.
3 Life insurance plans that work for your retirement planning
Here is a list of different types of life insurance policies that serve you as best economic alternatives to support you in your retirement planning:
1. Whole Life Insurance plans
Whole Life Insurance Plans are the ones that offer coverage to the insured individuals for the rest of their life if they continue to make payment of the policy premium on time. Here, if the policyholder survives the term of the plan they receive maturity benefits, while if they die during the policy duration the nominee receives death benefit. Once the premium payment duration of the whole life insurance policy is over, the insured receives regular payouts and is also allowed to make partial withdrawals that can be used for your post retirement plans.
2. Endowment Plans
An endowment policy is a simple type of life insurance plan that pays a lump sum amount at the time of maturity or when the insured individual dies. This plan can be used to create a saving amount that is entirely risk-free. Further, it also allows financial security to your family if you happen to die due to any untoward situation. Also, you can gradually earn extra bonuses that are collectively paid at the time of maturity or to the nominee in case of death of the policyholder. Thus, an endowment plan can be considered as one of the best retirement plans for your post retirement period.
3. Unit Linked Insurance Plans (ULIPs)
A ULIP is another great combination offering dual benefits of insurance and investment for long-term savings. In case of ULIP, the premium you pay for this plan is divided equally in two parts, one of which is secured for life insurance and the other is invested in different funds. The investment portion of your payment is distributed depending on your risk tolerance in different investments such as bonds, stocks, hybrid funds etc.
So, the above mentioned plans and many more policies are there that can be used as tools to plan your retirement.
Let us now discuss some tips that may help you in planning your retirement.
Tips to help while planning for retirement
Here are some points that you may keep in mind for making better decisions while buying policies for your retirement.
- List out your regular current expenses and predictable future expenses – Though calculating all the expenses may not be possible as there are many unforeseen costs that may arise suddenly. But you can still make a list of the current and predictable needs and their costs. You may also like to set aside a certain spending towards healthcare costs that would increase with age.
- Consider your likely income at present and in the future – You also need to calculate the amount of money that you must set aside from your current income towards your pension planning. You may use a retirement planning calculator to calculate this amount. Further, you may also take into account the sources of earning from other part-time tasks or investments.
- Consider your current income sources and investments – So, you also need to evaluate the likely income that your existing investments would generate all through your years of retirement.
- Consider the gap between retirement investment and retirement needs– If there is a gap between the capital required to have a comfortable life after retirement and the investment that you have made so far, it means that you need to fine tune your retirement planning.
Also Read: Senior Citizens Savings Scheme in India – Eligibility, Features and Tax Benefits
To Conclude
Though many people do not consider life insurance as a way to aid your retirement planning, it does serve as a bonus plan for pre-retirees. The combination offered in term life insurance of savings and investments serve as a crucial element of an attractive retirement plan. Read the plan documents well before buying them to make sure that you enjoy the fruits of the insurance plan aptly.
Found this post informational? Browse PayBima Blogs to read interesting posts related to Health Insurance, Car Insurance, Bike Insurance, Term Life Insurance and Investment section. You can visit PayBima to Buy Insurance Online.
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