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Money Back Policies: A Wise Choice
[Posted by: InsuringIndia Blog on 23-Mar-2016]
If you're a professional in your early thirties or forties who hadn't planned their financial future, there is good news for you. Endowment plans with a money back benefit is your best financial option as it will help you plan your future financial goals and also provide security to your kin in case of your demise.
 Unlike conventional life insurance policies which come with the basic principle of just being a security safeguard for the policy holder and his family, this type of policy, as the term "money back" suggests has the additional benefit of being an investment. 
What is money back policy? 
This type of policy comes with a liquidity option for the policy holder. What it entails essentially is that the person who is insured is given a certain percentage or portion of the assured amount, at regular intervals instead of being awarded a lumpsum at the end of the policy period.
Also, the sum which is given at these intervals in the form of instalments is known as survival benefit. This policy is clubbed into the category of endowment plans. 
This type of policy has a dual advantage of being an investment as well as a policy.
You can plan important milestones-- children's education, their marriage, etc. -- in your life and have regular withdrawals corresponding to these goals.
If the policy holder of the money back policy dies during the period of the policy, then the clause of death benefit is fully applicable. It means that the full sum assured at the time of buying the policy will be given to the next of the kin. In fact, in this scenario factors like survival benefit amount may not come into play as it may already have been paid as part of the money back component.
Tax exemption is yet another factor which makes this policy very attractive. Here, the premiums paid by the policy holder and the money received in the form of installments are tax-free.
It is a good savings plan which will have long term benefits. 
Certain policies have additional components that can give the policy holder an extra edge and make the policy more comprehensive. These add on riders could be a critical illness cover, benefit of accidental death and even a waiver of the premium benefit, among others. 
While buying this type of policy, read the terms and conditions carefully. It makes sense to analyze how much premium you'll be paying and for how many years. You also have to ascertain how much money will be accumulated. Also, always keep in mind that the premium amount in a money back policy will be higher. It's a good idea to buy these policies online, as you circumvent stresses like approaching an insurance agent. You save on unnecessary additional charges and are given more choices on an online portal. Also you can compare benefits and disadvantages of various money back policies and make a choice that is smart and gives you peace of mind, eventually. 

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*This is based on the difference between the highest and lowest premium's for a single person, age 25, looking for an individual health policy with the sum insured of Rs. 5 lakhs.
**This is based on the difference between the highest and lowest premium's for a single person, age 25, looking for a term plan, with the sum insured of Rs. 30 lakhs, and the premium paying term of 30 years.
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