• Term Life
  • Investment

What is Money Back Plan?

Money back life insurance policy has a two-way benefit of life insurance, with a saving element in it. If the policyholder, unfortunately, dies during the active policy period, the money back plan pays out the death benefit to the nominee/beneficiaries as mentioned in the policy document by the policyholder during the commencement of the plan.

Apart from the death benefit, the money back plan pays out the maturity amount over the course of the tenure of the plan on surviving. In short, a money back plan is similar to the endowment plan, but has cash back benefit element at regular intervals.

Why one should buy Money Back Policy?

The money back policy provides regular pay-outs; this ensures that there is a steady source of income that helps the policyholder to achieve short-term financial goals during the policy duration. It provides dual benefits of life insurance and investment in one single life insurance plan. This ensures that policyholder has a strong financial flow of money always. Money back plans provide guaranteed return on investment, irrespective of market conditions, making it a perfect fit for people who want both- life protection and as well as a guarantee source of income. The assured return on investment provides the policyholder an opportunity to generate wealth during the tenure of the plan.

Features of Money Back Plans

Death Benefit

The money back plan does not involve any risk to the investment of the policyholder as the sum assured is guaranteed along with life protection. The life insurance is provided for the entire policy term. If the policyholder dies during the active policy term of the money back plan, the nominee is eligible to get the entire sum assured as a death benefit. This is over and above the regular pay-out made to the policyholder during the course of the active plan.

Income at regular intervals

The money back policy provides a regular source of income to the policyholder during the tenure of the policy. The regular lump sum pay-out money can be used to meet short term goals by the policyholder.

Dual benefit in a single plan

The money back plan works as a life insurance cum savings plan which offers decent returns to the policyholder. The plan works as a great saving option for people who want to invest in a single policy and want dual benefits of investment and life insurance.

Safe Investment option for low-risk takers

Money back life insurance plan offers safe investment options for investors who don’t want to take the risk of volatile market conditions and want guaranteed returns on their investment.

Option to enhance the protection of the plan by adding valuable riders

The money back plan gives great flexibility to customise and enhance the protection of the money back plan through various rider options like critical illness rider, accidental death rider, disability protection rider etc. By paying a little bit extra rider premium, the plans offer valuable protection, thereby enhancing the overall protection of the plan and value for money for the policyholder.

Tax Benefits

The premium paid in the money back life insurance plan is eligible for tax benefits under Section 80C of the Income Tax Act, 1961 of up to INR 1,50,000 limit. So apart for all other benefits, it helps the policyholder to save tax on the premium paid in the plan annually for the eligible financial year.

Factors for Money Back Plan Premium Calculation

The advent of technology in the insurance industry has made life simple for people to choose money back plans by themselves. The insurance premium calculator helps a prospective customer to calculate the insurance premium that they will need to pay for a specific sum assured and policy term. The premium calculator tools help to plan the finances in an organised and well-planned manner. It helps a person understand how much money they will need to keep aside per month to pay for the insurance premium on their money back plan. To calculate the premium, you will need to input the age of the applicant, gender, scheme type, duration of the plan, additional rider requirements etc.

Let’s take an example of SBI Money Back Policy Plan for calculating premium payable-

  • Term of the Policy: 20 years
  • Sum assured in the plan: INR 10 lakh
  • Age of the applicant: 30 years
  • Result of premium including taxes: Monthly– INR.5,607
  • Quarterly premium payable – INR.17,147
  • Half-yearly premium payable – INR .33,633
  • Annual premium payable – INR.65,945

Top Money Back Policies

Money Back PlansPremium Payment OptionsPolicy Term optionsMin age of Entry Max age of EntryMaturity Age in the planSum Assured (Min)
LIC Money Back Plan 20 YearsLimited premium Pay for 15 years: Yearly, half yearly, quarterly, monthly20 years13 years50 years70 yearsINR.1 lakh
HDFC Life Super Income PlanLimited premium pay – 8, 10 or 12 years: Yearly, half yearly, quarterly, monthly16 years, 18 years, 20 years, 22 years, 24 years, 27 years30 days to 2 years48 to 59 years18 to 75 yearsINR. 1,28,337
SBI Life - Smart Money Back GoldRegular premium pay - Yearly, half yearly, quarterly, monthly12 years, 15 years, 20 years, 25 years14-15 years45-55 years27 to 70 years (67 years for 12-year plan)INR.75,000
Birla Sun Life Insurance Vision Money back Plus PlanRegular premium pay - Yearly, half yearly, quarterly, monthly20 | 24 | 25 years13 years45 years- INR. 1 Lakh
Bajaj Allianz Cash AssureRegular premium pay – Yearly , half yearly, quarterly, monthly16 years, 20 years, 24 years, 28 years0 Days54 Years18 years to 70 yearsINR.1 lakh
Reliance Nippon Life Super Money Back PlanLimited Pay for half of the policy term: Yearly, half yearly, quarterly, monthly10 years, 20 years, 30 years, 40 years, 50 years18 years55 years28 to 80 yearsINR.1 lakh

Top Money Back Policies Details

LIC New Money Back Plan – 20 years

LIC Money Back Plan- 20 Years is a participating non- linked life insurance plan that gives money back to every 5 years until the death of the policyholder or maturity of the policy term. A total amount of 20% is given back during the term of the plan and on maturity, the remaining 80% is given to the policyholder along with any accumulated bonuses in the scheme.

Benefits/advantages of LIC New Money Back Plan – 20 years

  • Comprehensive life insurance cover for the policyholder
  • The amount to be paid on the death of the policy holder includes the Sum Assured inclusive of all the bonuses. The lumpsum amount is payable to the policyholder irrespective of all the survival benefits paid earlier in the plan.
  • The policyholder gets the share of the profits of LIC’s life insurance business.
  • The plan gains a surrender value after a certain period

HDFC Life Super Income Plan

HDFC Life Super Income Plan is a non-linked, participating limited pay money back plan. Once the term of the premium payment period is finished, the policy pays back to the policyholder for the remaining policy term. The policyholder will get regular income in the form of payback in the plan for 8 years to 15 years, once the premium paying tenure is over. If the policyholder dies during this period, the nominee in the plan gets death benefit and the policy ceases.

Benefits/advantages of HDFC Life Super Income Plan

  • The plan comes with limited premium paying terms of 8, 10 or 12 years.
  • There is a guaranteed yearly income in this plan
  • Life coverage for the policyholder throughout the premium paying term and pay out period.
  • Medical test is not required to get enrolled in this plan

SBI Life Smart Money Back Gold

SBI Life Smart Money Back Gold is a participating plan that pays back at fixed intervals during the term of the policy. The money back period in the plan is dependent on the tenure of the policy. The policyholder will get the sum assured along with accrued bonuses at the end of the policy term. If the policyholder dies within the policy term, then the nominee will get death benefit sum insured and the policy will cease. The minimum premium amount payable in the plan is INR.400.

Benefits/advantages of SBI Life Smart Money Back Gold

  • 110% of the Sum Assured are paid in survival benefits till maturity.
  • Option of 4 terms in the plan 12, 15, 20 and 25 years.
  • Choice in premium paying modes monthly, quarterly, half yearly and yearly.
  • Option to add rider to enhance the protection of the plan
  • Tax Benefits as per prevailing Income Tax laws

BSLI Vision Money Back Plus Plan

Birla Sun Life Insurance Vision Moneyback Plus Plan is a non-participating life insurance plan that provides life insurance and money back. The money back benefits will depend on the chosen term of the policy. The policyholder will receive the defined percentage of the base sum assured as money back every 4 or 5 years, until the end of the policy term. The money back plan has guaranteed maturity benefits if the policyholder survives the policy term. In case if the policyholder dies during the tenure of the policy, then applicable death benefits will be paid to the nominee and the policy will cease.

Benefits/advantages of BSLI Vision Money Back Plus Plan

  • Guaranteed Survival Benefit - Every 4th or 5th policy anniversary as selected during inception
  • Death benefit includes Sum Assured on Death; plus Accrued regular bonuses; plus Terminal bonus (if any)
  • Maturity benefit includes the final pay out along with Accrued bonuses till date; plus Terminal bonus (if any)

Bajaj Allianz Cash Assure

Bajaj Allianz Cash Assure is an orthodox money back life insurance plan from Bajaj Allianz Life Insurance Company. The policy pays out cash back at regular intervals for the policyholder to meet short term financial goals. The policyholder can also choose optional riders to attach to the base plan to increase the value of the plan by paying an extra premium. There is a free look period in the policy for 15 days and 30 days, if the policy is purchased through distance marketing as per the IRDAI guidelines.

Benefits/advantages of Bajaj Allianz Cash Assure

  • The plan offers Guaranteed Money Back of up to 150% of the Sum Assured
  • Multiple choice of 4 policy terms, 16, 20, 24 and 28 years in the plan
  • Special rates for woman policyholders.
  • Choice to add rider to enhance the value of the plan
  • Survival and death benefit in the plan
  • Tax benefit as per prevailing Income Tax laws

Reliance Super Money Back Policy

Reliance Nippon Life Super Money Back Plan is a non-linked, non-participating life insurance plan that gives you money back every 5 years until the end of the policy term. The premium payment duration in the plan is only half of the term of the policy. The money back policy also has an extra benefit of increase in the sum assured through loyalty additions. The policy pays out guaranteed survival benefits at the end of the policy term or death benefit is paid out if there is an eventuality.

Benefits/advantages of Reliance Super Money Back Policy

  • Money back guarantee benefits payable every five policy years, until maturity.
  • Loyalty addition benefit in the plan
  • Maturity benefits payable at the end of the policy term.
  • Four policy term options of 10, 20, 30, 40 and 50 years.
  • Only half of the policy term is premium paying term
  • Multiple premium paying modes options of monthly, quarterly, semi-annual and yearly
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