Money Back Life Insurance Plan

Money Back Life Insurance Plan

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Money back plans have always been the preferred life insurance policies by the customers. The reason being simple- you get periodic payouts as well as lump sum benefits. So you can fulfill the expected oncoming financial goals and also end up getting maturity amount for future.

The Good:

What attracts people to money back policies is that they will be getting some amount of money every other year. So the intermediate expenses can be taken care of with the periodic payouts of money back plan.

There is also a lump sum benefit on maturity of money back plan. So one can use that amount as his or her future needs.

Most money back plan being traditional plan, the returns are guaranteed. And looking at the recent history of market ups and downs, the mindset of people is towards being safe than sorry.

The Bad:

Even though money back policies seem like to be excellent options, the reality is pretty different. First that most money back policies are traditional policies which means even though returns are guaranteed, they are low. And observing the rising costs, traditional plans are exactly what the name implies- outdated.

Secondly, if you cancel money back policy, you end up losing most of your basic investment as well. The guaranteed surrender value in most money back traditional plans is 30% of all premiums paid barring first year premium. There is no flexibility of withdrawing money at need. You can opt for loans but the interest rate charged could be more than the growth you might be getting on the money back plan.