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Are Money Back Policies Helpful?

dateKnowledge Centre Team dateAugust 02, 2021 views234 Views
Money Back Plan | Buy Money Back Plan | Endowment Plan

Today the public has multiple ways to safeguard their hard-earned money. Many people opt to get life insurance plan. However, a financial catastrophe might strike at any time, and we may want money very much now. If the insurance policy term hasn't expired, this isn't feasible. A money-back policy will become your savior in such difficult times.

A money-back plan is among the finest solutions if you'd like to add value to a financially stable retirement for yourself and your family. It also permits monthly reimbursements through the insurance term, which helps you meet the various milestones you will have in life.

Most people consider a money-back term plan won't benefit you due to a lack of higher returns. By the end of this, your thoughts on the money-back policy are going to change.

5 Benefits of Buying Money Back Plan

Money-back plans are insurance policies that allow you to earn extra if you participate. A money-back policy comes with a slew of other advantages.

1. Survival benefits

The capacity to offer Survival Benefit is what distinguishes money-back programs. The money-back policy is helpful by paying out Survival Benefit at regular cycles and is measured as a percentage of the Principal Amount. Various payment arrangements exist for different plans, but payments are made at periodic intervals throughout the policy term.

2. Maturity benefits

A money-back policy's maturity payments are provided out after the policy period. It is granted to the insurer, who must live until the plan's maturity date to collect it. At this time, all accumulated incentives are also handed out.

Learn how guaranteed maturity benefit is calculated.

3. Risk-free returns

One of the finest options for consumers looking to invest in risk-free programs is the money-back policy. There is almost no potential for harm, and it offers the best results. This program's guaranteed payments at policy maturity, survival benefit, periodical payments, and effective security layers make it a valuable alternative and benefit the investors.

4. Smooth premium payment

Premium payments can be made via a variety of methods. Premiums might be paid yearly, twice a year, once a quarter, or monthly. There is indeed a notice period that works as a minimum contract stretch in the event of premium delayed payments. If you don't pay your premiums, your insurance will lapse, and you'll have to pay reinstatement fees.

5. Tax benefits

One might also engage in a money-back policy while considering the tax advantages. According to income tax laws under section 80C and section 10(10D) of the Income Tax Act of 1961, tax advantages on the price received and the value created.

Features of money-back policy

Money back plans are prevalent and benefit you in ways to save and insure money. These fundamental characteristics of money-back programs are:

a) They offer cost-cutting features that allow them to cover expenses without having to dissolve the entire plan.
b) A money-back term plan is a low-risk investment that provides predictable returns.
c) Insurers can accumulate rewards throughout the insurance period.

Why must you invest in a Money Back Policy?

Money-back policies, like every other savings plan, are productive and have their special features. The fact that it pays out a fixed amount at regular intervals until the policy term's conclusion has attracted a lot of interest from investors.

Children's needs develop as they become older. They require funds to realize their ambitions. This policy aids in the achievement of such objectives. By investing in programs like the money-back term plan, one may prepare for financial goals such as education fees, wedding expenditures, and so on in advance.

This policy is unique in its sort. It's like a bonus because it also includes a life insurance policy. It is a necessary tool when an individual seems to be in economic difficulties and requires financial help to continue growing and prospering.

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Frequently Asked Questions

What is saving plan?

A savings plan is likely to be different for everyone depending on the financial goal, risk profile, returns, and investment horizon. If you are young and want to save for your retirement, ULIPs like Invest 4G or Titanium Plus plan would be the best option. You are likely to create a large corpus by your retirement through market-linked returns if you invest in this savings plan. If capital protection is your aim, then traditional insurance plans such as Guaranteed Money Saving Plan should be suitable for you.

Who should invest in a Savings Plan?

If you are looking for a guaranteed income plan, then saving plans should be on your list of investments that you are planning to make. Savings plan require you to invest a pre-decided amount on a regular basis. People with a regular stream of income who require a lump-sum amount after a period should opt for a savings plan. Working professionals, self-employed people and businessmen should consider a savings plan to meet their long-term financial obligations. Saving plans are also ideal for people who are risk-averse and want to accumulate funds through relatively safer mediums. These saving plans inculcate financial discipline in policyholders which make them crucial for every portfolio.

How much money should you put in savings each month?

The amount that should be invested in a savings plan each month depends on the income, existing financial obligations and the long-term financial goal. If you have a steady income, you should save at least 20% of your monthly income. It is not necessary to invest your entire money into a savings scheme as investments should be diversified. Ideally, you should aim to have a financial buffer of over 10 times of your annual income. Choose an income plan based on your financial circumstances to stay afloat.

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What is the difference between saving and investing?

Saving is the money that you keep aside for emergencies or for buying any big-ticket item. Investing means growing or multiplying the wealth that you have by buying savings plan, or any other assets. Buying a savings plan will help you in achieving your investment goals such as retirement, your child’s higher education or marriage, or for buying a new house.

Which savings plan is best for retirement?

The Invest 4G plan with its multiple investment options and various portfolio management strategies for capital protection is an ideal saving plan for retirement. Also, Guaranteed Income4Life is also another savings plan that you can consider for building your retirement corpus as it acts as a guaranteed income plan that will provide you maturity benefits to manage your post-retirement expenses.

Which savings plan is best for long-term goals?

Smart Goals Plan is a savings plan with its unique features such as modification of the sum assured partial withdrawal and fund switch can help you plan for your long-term financial goals. Canara HSBC Oriental Bank of Commerce Life Insurance offers a wide variety of saving plans that you can invest in as per your risk appetite and investment goal.

Which savings plan is suitable for girl child?

The Future Smart unit-linked plan from Canara HSBC Oriental Bank of Commerce Life Insurance is the ideal savings plan for the girl child. Monthly Income Advantage Plans are also a good option if you are planning to invest in a savings plan for your girl child.

Where should I invest my money?

You should spread your investments across financial instruments. However, having the best savings cum guaranteed income plan in your portfolio is extremely important. Savings plan ensures financial stability and also helps in fulfilling short, medium and long-term monetary goals.

What is a monthly income advantage plan?

A monthly income advantage plan ensures that you lead a stress-free life with your loved ones as it provides a life cover along with giving you guaranteed monthly income. In short, it is a life insurance and income plan that will financially secure commitments made to your loved ones. Canara HSBC Oriental Bank of Commerce Life Insurance Guaranteed Income Advantage Plan is a monthly income advantage plan that provides life cover for the entire term while you pay premium only for a limited period.

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What is a good age to start saving money?

When you plan to invest in a financial product, it always pays well to start early. The earlier you start saving and investing, the better. When you start investing early, the capital gets adequate time multiply. Even a small amount invested for a long time can give substantial returns due to compounding in a savings plan. Invest in an income plan as early as possible to build a significant corpus that will later help you in life. Ensure that you buy the best saving plan in India that can be aligned with your investment goals.

Should you use a savings plan for retirement planning?

Yes. Retirement planning is one of the most important financial decisions of our lives. The best saving plan offers a host of features that may help you build your retirement corpus. Some of the saving plans like Guaranteed Income4Life offer guaranteed returns at policy maturity. Such returns can act as a regular income stream even after your retirement to help you stay financially stable.

Are saving plans beneficial for managing unexpected expenses?

Yes. Best saving plans in India offer partial withdrawal system that can be utilized during your rainy days. Being financially prepared to tackle such odds will help you manage any unforeseen expenses in a smooth manner. Buy a monthly income advantage plan that will generate a steady source of income for you to take care of both long-term and short-term financial goals.

How to save tax by using savings plan?

Saving plans are known for helping us achieve our financial goals. Best saving plans allow you to grow your wealth while providing life cover. Saving and investment plans are also beneficial for tax planning. Premiums of savings cum protection plans come with tax benefit under Section 80C of the Income Tax Act. Moreover, proceeds received upon the death of the policyholder or upon the maturity of the policy are tax free under Section 10 10(D).

What is the right age to start saving money?

When you plan to invest in an income plan, it always pays well to start early. The earlier you start investing in a savings plan, the better. When you start investing early, the appreciation in capital is significant. Even a small amount invested in the best saving scheme for a long time can give substantial returns due to compounding. Buy the best savings plan as soon as you start earning to achieve all your milestones on time.

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How a savings plan can help in building your child’s education fund?

Saving plans help in building wealth over time against the investments that you make. Buy the best savings plan to build an education fund for your child. The best saving plan for kids offered by Canara HSBC Oriental Bank of Commerce Life Insurance eases the stress of planning your child's future by providing a lump-sum payout on the investment. Consider investing in a monthly income advantage plan to assist you in fulfilling your financial goals.

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How Savings Plans by Canara HSBC Oriental Bank of Commerce Life Insurance can help you?

Every person has a unique reason to save and invest. With ULIP savings schemes, the company caters to people seeking wealth creation through capital appreciation. Contrarily, the traditional plans can help you save for important life goals without worrying about the fluctuation in fund value. All major savings plan offers partial withdrawal facility that can help you take care of unplanned contingencies. With savings plans from Canara HSBC Oriental Bank of Commerce Life Insurance, you get adequate flexibility while investing and receiving the savings benefits, which makes them a good investment choice for investors looking for income plans.

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