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What is a Money-Back Plan in Life Insurance?

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Financial Sorcery
What is a Money-Back Plan in Life Insurance?

What is the money back plan at Future Generali India Life Insurance Company Ltd.?

Let us understand money back plan with the example of Ravi:

  • Ravi is a 30-year-old healthy male who has purchased the Future Generali Money Back Super Plan - Option 2.
  • He has opted for the Silver Category.
  • Ravi pays a yearly premium of Rs 50,000 (excluding applicable taxes).
  • His policy term and premium paying term is 20 years.
  • His sum assured is Rs 3,00,000


What Ravi gets from this money back plan?

1. Maturity Benefit - If Ravi survives to the end of the policy term, provided all premiums are paid, he will receive the sum assured of Rs 3,00,000 as maturity benefit.

2. Survival Benefit - Ravi receives Rs 90,000 per year for the duration of his policy from the end of his 10th policy year to the end of his 19th policy year.

3. Guaranteed Additions - From the end of the 8th policy year until the end of the 20th policy year, Ravi's policy accrues a guaranteed addition of Rs 12,054. As a whole, the accrued guaranteed additions of Rs. 1,56,702 will be paid to Ravi at maturity, i.e. on maturity, the total benefit Ravi will get is Rs. 4,56,702 including the Sum Assured.

4. Tax Benefits - Ravi shall be eligible for tax benefits on the premium(s) he pays and benefit proceeds, according to the provisions of Income Tax laws as amended from time to time. These benefits are subject to change as per the current tax laws. Please consult your tax advisor for more details.

5. Two Plan Options - Ravi got the option to choose from two plan options i.e. Option 1 & Option 2, based on his planned financial milestones. These options vary by Sum Assured and the amount of survival benefit payable

6. Death Benefit also known as Life Cover - Let's assume that Ravi’s death occurs at the end of 2nd policy year. The benefit payable under Option 1 to Ravi's nominee(s) will be:

10 times the Annualized Premium i.e. Rs 5,00,000

105% of the total premiums paid i.e. Rs 1,05,000

Key Features of Money-Back Plans

● Corpus Accumulation: Savings can be accumulated over time by investing. Through money-back policies, you can easily create good wealth and secure investments. Apart from giving regular paybacks to the policyholder, money-back policies help building a corpus through its maturity benefit.

● Regular Payouts work as Guaranteed Source of Income: We live in times where having a second source of income is becoming necessary day-by-day. With a money-back plan, the insured receives regular payouts. It also helps to overcome short-term financial needs.

● Secured Saving Avenue: The key to a sound portfolio is diversification to minimize risk. Hence, to balance a portfolio, it is essential to invest in less risky avenues, and guaranteed benefit money-back plans serve the purpose with ease.


To read full article visit : https://life.futuregenerali.in/life-insurance-made-simple/life-insurance/what-is-a-money-back-policy/

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