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    Why should you purchase money back life insurance plan?

    Why should you purchase money back life insurance plan?

    Why should you purchase money back life insurance plan?
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    By CNBCTV18.com Contributor  IST (Published)

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    Life Insurance primarily provides life protection against the risks due to certain but unpredictable events that have an adverse effect on the financial standing of an individual or one’s family.

    Life Insurance primarily provides life protection against the risks due to certain but unpredictable events that have an adverse effect on the financial standing of an individual or one’s family. Life Insurance provides financial protection against the risk of the untimely death of a breadwinner to a family.
    Along with protection life insurance plans also come with savings components that can be used as investment tools for an individual’s life goals. People measure their lives in milestones that in some cases are related to fulfillment of goals. Some of these goals involve the need for substantial finances; like buying your first car, moving into a self-owned home, your first family overseas vacation, enrolling your child into a prestigious education institute, retirement etc. The key to the fulfillment of these goals is disciplined and time-bound savings.
    Insurance plans that include a saving component include providing an individual with an avenue to save for these life goals. These plans can be of various types like Endowment Linked Policies, Unit Linked Policies, or Annuity Plans. The most popular one of these plans are the Endowment Policies that have the least risk involved and in some cases also provide guaranteed returns. However, most of these insurance plans tend to be long-termed.
    For customers that prefer more liquidity during the term and also for smaller/ more immediate life goals, there are money back policies where a guaranteed amount is provided to the customer; on continuously paying the stipulated premium; at regular intervals in the form of survival benefits. In addition, these plans also have a maturity amount payable at the end of the policy term along with life protection.
    The features of these plans are highlighted below:
    Money Back Life Insurance Plans
    Money back plans offer periodical survival benefits along with maturity benefit and life cover. This plan is beneficial to people who would like to receive payouts during the policy term.
    These survival benefits can be used towards your children’s education/marriage, investing in your business or your dream family vacation.
    Choice of Policy Terms
    Money back plans offer multiple policy term choices depending on the needs and goals of the customer.
    Survival Payouts
    Payouts are made during the policy term at specific intervals and are paid out as a percentage of the Sum Assured. The number of survival payouts may differ according to the policy term chosen. For example, a 15-year policy term may offer three payouts whereas a 25-year policy term may offer 5 payouts.
    High Sum Assured Rebates
    Premium discounts may be offered depending on the Sum Assured chosen by the customer.
    Riders
    Optional riders may be offered for increased protection.
    Thus Money Back plans are a great tool for a customer looking for the benefits of both long-term investments along with some short-term benefits.
    The writer, Casparus Kromhout, is MD and CEO at Shriram Life Insurance. The views expressed are personal
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