A Comprehensive Guide To Money-Back Policies

The Essence of Money-Back Policies

A money-back policy, as the name suggests, is an insurance policy wherein the insured is eligible to receive a percentage of the sum assured at regular intervals, instead of a lump sum sum payout at the end of the term. Nonetheless, if the policyholder survives the policy term, they receive the balance lump sum amount. The unique selling factor in this insurance policy model is that it offers life coverage and periodic returns, providing a stream of income at regular intervals. Therefore, the policy is highly advantageous in catering to financial needs from time to time.

Why Consider a Money-Back Policy?

One primary reason you should consider a money-back policy is that it serves dual purposes - catering for life insurance and offering periodic returns. With such a policy, you can plan and meet your financial goals at different life stages without resorting to your savings or taking a loan. At the end of the policy term, you're also eligible for a lump sum amount, either as maturity benefit or bonus.

Insurance companies calculate the premiums you pay for a money-back policy based on the sum assured, policy term, and your age. The higher the sum assured and shorter the policy term, the higher the premium will be.

Features and Benefits of Money-Back Policies

Money-back policies bring forth a bouquet of features and benefits that can be tailored to suit your financial needs. Such policies offer several benefits including:

• Survival Benefit: This is the periodic amount returned to the insured during the policy term. It comes as a reward for surviving the certain term within the policy.
• Maturity Benefit: It's the amount paid to the insured if they survive the whole policy term. It usually consists of the balance sum assured and bonuses, if any.
• Death Benefit: If the insured dies during the policy term, the nominee is paid death benefit – generally the full sum assured along with accrued bonuses, if any.
• Rider Benefit: It refers to additional benefit that can be availed by paying extra premium. These may include critical illness cover, accident death, and disability benefit rider, among others.

Eligibility Criteria for Money-Back Policies

Just like other insurance policies, money-back policies also have an eligibility criterion that must be fulfilled. This may vary across different insurers, but typically includes the following:

1. Age: The minimum entry age for most money-back policies is 18 years, while the maximum age limit can go up to 60 years or above, depending on the insurance company's rules.
2. Policy Term: The policy term is the time period during which the policy is operational. It typically ranges from 10 to 25 years or more.
3. Sum Assured: It's the guaranteed amount that the beneficiary would receive and usually starts from as low as $1000.

How to Apply for A Money-Back Policy

Acquiring a money-back insurance policy is often a simple and straight forward process. Below is a simplified procedure that you can follow:

Online Application

• Visit the insurer’s website and select the money-back policy that best suits your needs.
• Choose the sum assured and policy term as per your requirement.
• Fill up the online application form with necessary details such as name, address, age, occupation, and medical history, among others.
• Pay the premium via net banking, debit card, or credit card.
• Upon successful payment, your policy will be issued and the digital copy will be sent to your registered email address.

Offline Application

• Visit the insurance company's branch office.
• Get in touch with a company's executive or agent and express your interest in acquiring a money-back policy.
• Fill out the application form and submit it along with the necessary documents.
• Once the documents are verified and the premium is paid, the policy will be issued to you.

What To Look For In A Money-Back Policy?

While choosing a money-back policy, make sure to consider these pointers:

1. Check the policy tenure: This will impact your premium payment as well as the survival and maturity benefits.
2. Evaluate the survival benefits: Determine the periodic payouts you will receive and when.
3. Check for availability of riders: Understand whether the policy allows for additional coverage to enhance your protection.
4. Check the company's claim settlement ratio: This will show the percentage of claims the insurer has settled, thus indicating their reliability.

Prudent Step Towards Financial Security

In conclusion, money-back policies offer a balanced blend of insurance and investment, making them a smart move towards financial security. Such a policy not only helps you stay financially prepared for different life stages but also offers you peace of mind knowing that your family's future is secured, even when you're not around. It's prudent to evaluate all factors, compare offerings from different companies, and choose the one that fits perfectly with your financial goals.