• Money Back Policy – Overview & Key Details

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    What is a Money Back Insurance policy?

    A traditional insurance plan pays out a lump Sum Assured in the event of the death of the life insured. The beneficiaries / dependants / nominees of the life insured receive a benefit (called a death benefit) if the worst should come to pass for the insurance holder.

    A money back insurance plan pays out the same maturity benefits in the form of several guaranteed “survival benefits" which are staggered evenly throughout the course of the policy. So, a money back insurance policy is an endowment plan with the benefit of regular liquidity.

    Why You Need To Buy a Money back Policy?

    A money back policy provides periodic pay-outs, ensuring a steady source of income to help policyholders meet expenses at different stages during the policy duration.

    Money back policies provide the benefits of an insurance policy as well as an investment, ensuring that the policy earns the policyholder an income instead of just merely providing a lump sum in case of his/her demise.

    These plans offer a guaranteed return on investment as well as periodic pay-outs and insurance cover, making it an ideal plan for individuals looking for both protection as well as a source of income.

    In addition to the standard life insurance offered by regular policies, a money back policy offers a policyholder a maturity benefit as well as a regular income in the form of ‘survival benefits’ for the duration of the policy.

    A Money Back Policy thus provides policyholders with a secure and assured return on investment in addition to providing them with an opportunity to grow their wealth through investment opportunities.

    How Does Money Back Policy Work?

    A Money back policy is a type of life insurance policy that offers policyholders Survival Benefits as well as investment opportunities in addition to Maturity Benefits.

    An average money back policy with a 20 year tenure would thus pay the policyholder what is known as a ‘Survival Benefit’ a few years after the start of the policy. Around 20% of the Sum Assured would be paid out periodically, while the balance would be paid out at the time of policy maturity with a bonus, if any.

    In the event the insured individual does not survive till the policy maturation, the nominee would receive the Death Benefit (the entire Sum Assured) and the policy would be terminated.

    Features of Money Back Policy:

    The money back policy has a number of distinct features that set it apart from other life insurance products, as mentioned below:

    • Money back plans provide policyholders with low risk investment options as well as insurance coverage.
    • The policies provide a regular source of income in the form of ‘Survival Benefits’ for the duration of the policy.
    • In the event of the policyholder’s demise during the policy term, the entire Sum Assured is paid out to the nominee irrespective of the amount already paid through the Survival Benefits.

    Money Back Life Insurance Benefits:

    • Provides insurance cover during the policy term.
    • Pays out regular benefits throughout the term.
    • Works as an insurance policy as well as a long-term investment with good returns.
    • Provides tax benefits.
    • Less risky than other investments offering similar returns like mutual funds.
    • Enables long-term savings and regular income.
    • Ensures that amounts are disbursed regularly.
    • Some plans extend the insurance coverage guaranteed death benefits even after the maturity date and the last survival period, up to when the life insured attains the age of 100.
    • There are optional riders that cover things like specific illnesses, critical illnesses, disabilities, etc.

    How to Choose a Money Back Policy:

    Choosing the right money back policy is key to ensuring individuals receive the maximum benefits from a particular policy.

    When choosing a money back plan, individuals should look at the policy tenure. The average tenure for a money back policy is around 20 years.

    As money back policies pay policyholders a Survival Benefit, prospective policyholders should ascertain the percentage of the Sum Assured that will be paid out in instalments. The amount should be enough to cover any expenses the policyholder might have.

    The type of investments available through the investment component of the policy should be looked over. Policyholders should also verify the duration of the pay-outs being made over the course of the policy term as Survival Benefits. Some plans pay policyholders every 5 years, others have a different timeline depending on the policy tenure.

    Policyholders should also check to see if the money back policy offers tax benefits. Some plans do not offer a tax benefit if 20% of the Sum Assured is being provided as Survival Benefit.

    Eligibility Criteria for Money Back Policy:

    Prospective policyholders should meet certain criteria to qualify for a money back policy. The eligibility criteria are broadly listed below:

    • Policyholder should be above the minimum entry age and below the maximum entry age (varies from policy to policy).
    • Policyholder should be able to pay the Sum Assured as per the policy guidelines.

    Documents Required for Money Back Policy:

    The documents required to apply for a money back policy are listed below:

    • Proof of age document.
    • Proof of address document.
    • Application form duly filled in.
    • Medical reports (if applicable).

    Money Back Policy Calculator:

    For the purpose of computing the premium amount as well as the benefits that will be accrued, a number of insurance companies provide individuals with policy calculators. These calculators can be used to approximate the returns as well as costs associated with the policy in question. The individual can then choose to apply for the policy after looking over the figures to see if they are in line with his/her requirements.

    A money back policy calculator computes the average premium to be paid based on the policy tenure and the Sum Assured. Additional details such as the age of the policyholder are also factors considered for calculation.

    On entering the figures, the calculator computes the maturity benefit payable at the time of policy maturity as well as the premium payable.

    Money Back Policy Riders:

    Money back policies provide policyholders with the option to add cover that is not included in the original policy document in the form of riders. These riders cover additional possibilities such as accidental death, hospitalization expenses, permanent disability and critical illness to name a few.

    The riders provided along with a money back policy differ from insurer to insurer and also depend on other variables such as the policy tenure.

    A general list of riders that can be purchased along with a money back policy are given below:

    • Accidental Death Rider: this rider provides coverage in case the policyholder meets with an accidental death as outlines in the rider guidelines. In such a scenario, the policyholder’s beneficiaries/nominees will receive a lump sum as additional benefit.
    • Term Rider: this rider provides the policyholder with a waiver from paying the premium amount under certain circumstances but still provides coverage to the policyholder.
    • Critical Illness Rider: this rider provides the policyholder with financial assistance in the event he/she contracts a critical illness as defined by the rider.
    • Hospitalization Rider: this rider provides the policyholder with assistance in paying hospital bills in the event the policyholder is hospitalized. A daily allowance is issued to the policyholder to cover expenses related to treatment.

    Popular Money Back Plans by Insurers

    1. LIC Money Back With Profit

      Feature and Benefits:

      • Comprehensive life insurance cover against death.
      • The amount payable on death is the Sum Assured plus all bonuses, as a lump sum, irrespective of all survival benefits paid earlier.
      • With-profit plan which participates in the profits of LIC’s life insurance business.
      • Surrender Values are available.
    2. Popular LIC Money Back Plans

    3. HDFC Life Super Income Plan – Money Back policy

      Feature and Benefits:

      • Limited premium paying terms of 8, 10 or 12 years.
      • Guaranteed yearly income, for 8, 10, 12 or 15 years.
      • Coverage against death throughout premium paying term and pay out period.
      • No need for medical tests on the completion of a short medical questionnaire.
      • Regular income at the rate of 8.0% to 12.5% of the Sum Assured on Maturity, payable yearly.
    4. SBI Life – Smart Money Back Gold

      Feature and Benefits:

      • Survival benefits of 110% of the Sum Assured paid till maturity.
      • 4 term options – 12, 15, 20 and 25 years.
      • Monthly, quarterly, half yearly and yearly premium paying modes.
      • 4 riders available:
        • SBI Life – Accidental Death Benefit Rider.
        • SBI Life – Accidental Total and Permanent Disability Rider.
        • SBI Life – Preferred Term Rider.
        • SBI Life – Criti Care 13 Non-Linked Rider.
        • Tax benefits.
    5. Birla Sun Life Insurance Bachat Money Back Plan

      Feature and Benefits:

      • Monthly base premium amount can be chosen from these bands:

        • Band 1 – Rs.400 to Rs.599, per month.
        • Band 3 – Rs.600 to Rs.800, per month.
        • Band 4 – Rs.900 and above, per month.
      • Annual and semi-annual modes of premium payment entitles you to rebates of 2% and 4% respectively.
      • Survival benefit of 20% of the monthly base premium paid out on the 5th, 10th and 15th policy anniversaries.
      • Maturity benefit payable after 20 years of the policy term includes
        • All monthly base premiums paid, plus
        • All Bachat addition earned, plus
        • Loyalty additions, minus
        • All Survival Benefits paid.
      • Death benefit includes:

        • All monthly base premiums paid (or Sum Assured, whichever is higher), plus
        • All Bachat addition earned, plus
        • Loyalty additions, minus
        • All Survival Benefits paid.
    6. Reliance Super Money Back Plan

      • Money back benefits paid every 5 policy years, until maturity.
      • Increasing regular monthly income.
      • Loyalty addition payable at the end of the premium paying term.
      • Maturity addition payable at the end of the policy term.
      • Policy term options of 10, 20, 30, 40 and 50 years.
      • Premium paying term only half of the policy term.
      • Monthly, quarterly, semi-annual and yearly premium paying modes.

    Are Money Back Policies For You?

    The decision to take on a money back insurance policy must be well thought out and its benefits, returns on investment, etc. must be compared against those of similar investments.

    If you are a healthy individual in need of life insurance cover and an investment that helps you save on tax in addition to giving you regular returns, you may choose to opt for a combination of financial products, or opt for a single money back insurance policy which does the same thing (albeit at a lower rate of returns). It’s important to note that the risk involved in your investment is proportional to the returns you will receive.

    You may purchase a life insurance policy and invest in a separate mutual fund, etc. and expose yourself to the risks involved in a mutual fund investment. It’s ideal for those with a high risk appetite. For those who find that their life savings are too valuable to leave to chance, an endowment life insurance policy with a money back policy is ideal.

    A money back policy is far less risky than a mutual fund investment. In addition to being a tax saving investment with guaranteed returns during the course of the term, it also provides comprehensive life insurance cover – which is a win-win situation for the investor (and his dependents).

    There are arguments against money back plans because the regular returns on investment are not as high as those offered by mutual funds, equity and debt related investments of similar amounts for similar tenures. Investing in two separate financial products – one for a life insurance policy and one for a product directed to give you returns on investment – will pay off better with a higher percentage of returns. That being said, it must be noted that while there are better options for returns on investments, money back policies are first and foremost insurance policies. They just have the added benefit of giving you a return on the premium you’ve invested – at regular intervals during the plan tenure.

    Consider your risk appetite and requirement for life insurance cover before taking any major financial decision.

    Money Back Policy FAQ’s

    1. Is the amount received through a money back policy taxable?

    A. If the premium paid is more than 10% of the Sum Assured for policies purchased after April 1st, 2012, the amount received is taxable.

    2. Is there a penalty if I do not pay my premium for my money back policy on time?

    A. If the premium amount is not paid within the grace period allotted for the same, the policy lapses and benefits associated with the policy cease. If the premiums have been paid for a minimum of 3 years, a paid up value for a reduced sum is created.

    3. Can I revive a money back policy?

    A. Money back policies can be revived within 2 years from the date the last premium was paid.

    4. Can I transfer my money back policy?

    A. As of now, it is not possible to transfer a money back policy. The policy can be surrendered if desired.

    5. How do I surrender my money back policy?

    A. A money back policy can be surrendered on its attaining cash value (after payment of 3 years’ worth of premiums). The policy will have a surrender value based on the policy tenure and the number of premiums paid.

    GST of 18% is applicable on life insurance effective from the 1st of July, 2017

    Money Back Plans Reviews

  • Page 1 of 50 1 2 3 4 5
    • LIC Life Insurance
      "Good. Can do better"
      0.5 3.0/5 "Satisfactory"
      My life insurance is with LIC. I make my payment through cheque. The person comes and collect's the cheque . Overall it is good and not excellent. It would be better if there is a better sum assured and they should be flexible in the products. It is a Term insurance and the tenure is long. The premium is also economical.
      Was this review helpful? 0
      , mumbai
      Reviewed on Feb 23, 2018
    • LIC Life Insurance
      "Excellent service"
      0.5 5.0/5 "Blown Away!"
      I have taken Life Insurance with LIC ,the premium amount is 300 paid by an auto debit payments.The policy is for 15 years.The policy coverage amount is 30,000.I have claim experience with them two years back they had given the sum assured.
      Was this review helpful? 0
      , chennai
      Reviewed on Feb 23, 2018
    • LIC Life Insurance
      "Excellent service"
      0.5 5.0/5 "Blown Away!"
      I have taken a Life insurance with LIC,the plan name is money back,the policy is for 15 years.I paid a premium amount of 500 monthly.The policy coverage is 50,000.The agent is very helpful and they had shared the complete details of the scheme.
      Was this review helpful? 0
      , chennai
      Reviewed on Feb 23, 2018
    • HDFC Life Life Insurance
      "Best policy to use"
      0.5 5.0/5 "Blown Away!"
      I have a life insurance policy with HDFC LIFE from last 4 years and it is a long term policy. The tenure of this life insurance policy is 12 years. I pay my premium on annual basis through net banking and i am convenient with the payment options which they are giving. I am happy with the coverage and benefits of this policy.
      Was this review helpful? 0
      , new delhi
      Reviewed on Feb 23, 2018
    • HDFC Life Life Insurance
      "Average service"
      0.5 4.0/5 "Great!"
      I have got the life insurance policy from the HDFC life around 4 months ago. The customer support service is average with the HDFC life. This policy has the tenure of 2 years. I pay the premium amount of Rs,400 to this policy every month and this policy value is Rs,8000.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Feb 23, 2018
    • LIC Life Insurance
      "Good to Go"
      0.5 5.0/5 "Blown Away!"
      I am having the life insurance policy with the Life Insurance Corporation of India and am using it from the last three years of time. I would like to say that the response is also good too and the policy coverage value is also fine too.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Feb 23, 2018
    • LIC Life Insurance
      "Good policy to use"
      0.5 4.0/5 "Great!"
      I have a life insurance policy with LIC from last 5 years and it is a long term policy. The tenure of this life insurance policy is 20 years. My premium amount gets auto deducted every month and the payment options are convenient for me. I am happy with the coverage and benefits of this policy.
      Was this review helpful? 0
      , bangalore
      Reviewed on Feb 23, 2018
    • LIC Life Insurance
      "Good "
      0.5 4.0/5 "Great!"
      I am having the life insurance policy with the Life Insurance Corporation of India from 2008 onward. I would like to say that the customer service is good one for me and the response is also good one too. Policy coverage value is also better too.
      Was this review helpful? 0
      , new delhi
      Reviewed on Feb 23, 2018
    • LIC Life Insurance
      "Good policy to use"
      0.5 5.0/5 "Blown Away!"
      I have got the life insurance policy from the LIC around 6 years ago. This policy has the tenure of 20years. This policy name is JEEVAN ANAND. I pay the premium of Rs,2300 every month. The plan benefits and the policy coverage is good with the LIC life insurance policy .
      Was this review helpful? 0
      , hyderabad
      Reviewed on Feb 23, 2018
    • LIC Life Insurance
      "Best policy to use"
      0.5 5.0/5 "Blown Away!"
      I have a life insurance policy with LIC from last 4 years and it is a long term policy. The tenure of this life insurance policy is 20 years. I pay my premium once in 6 months through net banking and i am convenient with the payment options which they are giving. I have a coverage of Rs 5 lakhs and i happy with the returns in this policy.
      Was this review helpful? 0
      , navi mumbai
      Reviewed on Feb 23, 2018
    • LIC Life Insurance
      "Excellent service"
      0.5 4.0/5 "Great!"
      Got the life insurance policy from the LIC around 2 years. This policy has the tenure of 15years. The customer support and the response is good with the LIC . They give better response to the customers. The plan benefits and the policy coverage is better with the LIC life insurance policy.
      Was this review helpful? 0
      , bangalore
      Reviewed on Feb 22, 2018
    • LIC Life Insurance
      "Good "
      0.5 4.0/5 "Great!"
      I am having the life insurance policy with the Life Insurance Corporation of India. I have felt that the customer service is good one for me and the coverage value is also fine, also the plan benefits too. Response is also good one with the LIC of India.
      Was this review helpful? 0
      , bangalore
      Reviewed on Feb 22, 2018
    • LIC Life Insurance
      "Fantastic"
      0.5 4.0/5 "Great!"
      I am having the life insurance policy with the Life Insurance Corporation of India. Customer service is good one with them and the plan benefits are fine one for me, also every policies are traditional one. Response and other aspects are up to the mark.
      Was this review helpful? 0
      , new delhi
      Reviewed on Feb 22, 2018
    • LIC Life Insurance
      "Trusted and Good service"
      0.5 5.0/5 "Blown Away!"
      I have my life insurance policy with Life Insurance Corporation of India as I have a very good trust on them because they are a long time company like government owned company. I hold a policy for 5 lakhs and for this policy I pay around Rs. 25000 to Rs. 29000 as annual premium. This is a 20 years policy.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Feb 22, 2018
    • LIC Life Insurance
      "Good Investment"
      0.5 5.0/5 "Blown Away!"
      I have taken a total of three schemes with LIC and felt all of them to be quite convenient. For the Money back plan that I have, premium of Rs.18600 has been invested on an annually basis. For my other schemes I have been Rs.13600 as an annual premium. For money back plan every 5 years I would be getting cashback on that years premium. At the end of my whole term I would be getting a lumpsome amount.
      Was this review helpful? 0
      , new delhi
      Reviewed on Feb 22, 2018
    • SBI Life Life Insurance
      "Good policy to use"
      0.5 3.0/5 "Satisfactory"
      I have taken a Money back policy with SBI Life from last 20 years and it is a good policy to hold. The tenure of this life insurance policy is 20 years and i get a cash back after every 4 years. I pay my premium once in a year through net banking and the payment options are convenient for me. I get good coverage and returns in this policy.
      Was this review helpful? 0
      , new delhi
      Reviewed on Feb 21, 2018
    • LIC Life Insurance
      "Good policy to use"
      0.5 4.0/5 "Great!"
      I have a life insurance policy with LIC from last 6-7 years and it is a short term policy. The tenure of this life insurance policy is 10 years. I pay my premium on annual basis through net banking and i am convenient with the payment options which they are giving. I am happy with the coverage and returns in this policy.
      Was this review helpful? 0
      , new delhi
      Reviewed on Feb 21, 2018
    • Future Generali Life Life Insurance
      "Good policy to hold"
      0.5 4.0/5 "Great!"
      I took accidental cover from Future Generali, they are providing all the benefits and the product is good. For normal accident also I can claim from them. Yearly I make the premium around Rs. 2900 for the tenure of one year. Total sum assured value of Rs. 15 lakhs. For disability they provides good coverage.
      Was this review helpful? 0
      , mumbai
      Reviewed on Feb 21, 2018
    • LIC Life Insurance
      "Good Insurance Company"
      0.5 5.0/5 "Blown Away!"
      LIC is good, I took the policy before six year. Every month I make auto debit premium around Rs. 1000 for the tenure of 25 years. I took Jeevan anand, after completing the tenure period I would get the sum assured around Rs. 24 lakhs with life cover.
      Was this review helpful? 0
      , mumbai
      Reviewed on Feb 21, 2018
    • LIC Life Insurance
      "Best INSURANCE CORP."
      0.5 5.0/5 "Blown Away!"
      LIFE INSURANCE CORPORATION( LIC ) IS A FINANCIAL INSTITUTION THROUGH WHICH I ENTER INTO THE WORLD OF INSURANCE. I THINK IT HAS THE BEST CORP. TO OPEN AN POLICY AND ALSO FOR OTHER FINANCIAL AND INVESTMENT PRODUCTS IT IS A EXCELLENT AND INEFFABLE.
      Was this review helpful? 0
      , ajmer
      Reviewed on Feb 21, 2018
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