What is Money Back Life Insurance and Are they worth it

What is Money Back Life Insurance?

The money back life insurance policy is an insurance policy under which the person who has been insured is eligible for a percentage of the sum that has been assured to him or her. Supposing the insured person dies during the policy period, the person who has been nominated by the insured person gets the assured sum.

Among insurance policies, this kind of policy is in great demand because of the fact that people are assured a certain amount of money. This kind of policy comes up to usually for a period of more than 20 years. When you decide to purchase a money back life insurance policy, you have to pay the premium amount that is fixed, periodically.

You can pay monthly, or once in four months, or yearly. The best part about this life insurance policy is that, you get an exemption from tax. However, that depends from which country you are from. In India, this life insurance policy doesn’t get taxed. Unlike, other life insurance policies that provide you only death benefits, this policy comes with added cash value.

What is Cash Value?

Cash value allows you, the insured person to increase your premium price, which you are paying to the insurance firm or company. When you are someone who wants an insurance policy that is a combination of both investments and life insurance, this is the ideal option. The money that is getting out from your premiums is added to your policy.

This money is given to you at the end of your policy along with the sum assured. When you have decided to go in for this kind of life insurance policy, you might want to use it for a long period of time, not for a short period of time. 

Are They worth It

Is the money back life insurance policy worth it? Like the name goes, money back or cash value insurance policy, you get a certain amount of cash during the years of having the money on your policy. In the sense, your money gets increased when you pay your premiums regularly. Since this life insurance policy is designed for your entire life you gain from the interests.

Given below are a few benefits of the money back life insurance policy.

Get your money

Like mentioned in the earlier paragraphs of this article, you stand to get your money returned once the period has been completed. The firm or insurance company will pay you the premiums which you have paid all these years. There have been many cases, where the insured person has defaulted on their premium payments.

During such situations, the cash value pays the premium for you, so that your policy does not get lapsed. However, when the money gets ended, you will have to pay your premiums on time or your policy will most likely get closed. This is not a good idea as you don’t stand to benefit from the policy.

So, make sure that you pay your premium amounts on time and get the benefits when the period is over. 

Withdraw cash value

During an emergency, you have the right to withdraw your money through the policy. You can compare this situation to withdrawing money from your bank. But, your bank won’t give you any coverage for your money. This insurance policy gives you both security and coverage for your money.

Through the money back life insurance policy, you are not only saving money, but protecting your family.