A money back plan is a simple endowment plan with a liquidity benefit. In insurance Terms it is called as an anticipated endowment plan. Under this plan, there is a specific amount/ percentage of the sum assured is paid at regular intervals which Is called as survival benefit. In case, the insured dies during the policy term, then a death benefit will be payable to the nominee and the policy would be terminated.

Here, the maturity benefit or survival benefit is paid in installments instead of lump sum. Money back policies are a combination of insurance with investment and savings.

Let us understand with an example:

Mr. Rajeev rathod has opted for a money back insurance plan.

Sum assured: 10 lakhs for a policy term of 25yrs.

Here, mr. Rathod needs to pay a fixed premium for 25yrs and on intervals he would get a part of his sum assured, i.E. For a policy of 25yrs, he would get 15% of the sum assured after the 5^Th, 10^Th, 15^Th and 20^Th year of the policy. So, he shall be receiving 60% (15 x 4) of the sum assured as a survival benefit. However, on the Maturity he shall be getting the remaining 40% of the sum assured.

Some points to consider while buying a money back plan:

• A money back plan is suitable for individuals who wishto save some money through insurance and also maintain liquidity throughout.
• Suitable for customers who required money at regular and specific intervals.
• If offers a Tax free returns at regular intervals which can be utilized for any financial needs faced by the insured. E.G.: children's education, holidays, emergencies, or can also be reinvested.
• Pure insurance plan which is offered at less expensive premium option.
• A financial flexibility which gives peace of mind.

Basics of money back policy:

Please note: the above conditions may vary depending on the insurance company and plan you might have chosen. It is advisable to read the policy terms & conditions carefully before choosing the right plan.