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What's a Money Back Policy and Why do You Need One?

What's a Money Back Policy and Why do You Need One?

Introduction to Money Back Policy

In today's uncertain world, it is crucial to have a financial safety net that can provide security and peace of mind. One such option is a life insurance money back policy, a type of life insurance that not only offers protection but also returns a portion of the premium paid. In this blog, we will explore the concept of money back policies, their benefits, and how they can help you secure your financial future.

Understanding Money Back Policy

A money back insurance plan is a unique life insurance plan that combines the benefits of protection and savings. Unlike traditional life insurance policies, where the sum assured is paid only upon the death of the policyholder, a life insurance money back policy provides periodic payouts during the policy term. These payouts, known as survival benefits, are a percentage of the sum assured and are paid at regular intervals.

Benefits of Money Back Policy

Financial Security

A life insurance money back policy ensures that your loved ones are financially protected in case of your untimely demise. The sum assured is paid to the nominee, providing them with the necessary funds to meet their financial obligations.

Periodic Payouts

One of the key advantages of a money back lif insurance is the periodic payouts it offers. These payouts can be used to meet various financial goals such as children's education, marriage expenses, or even funding a dream vacation.


Unlike other long-term investment options, a money back insurance plan provides liquidity. The periodic payouts can be used as a source of emergency funds, ensuring that you have access to cash when you need it the most.

Tax Benefits

Money back policies also offer tax benefits under Section 80C of the Income Tax Act. The premiums paid towards the policy are eligible for tax deductions, reducing your overall tax liability.

Also Read: Term Insurance With Return of Premium

How Does a Money Back Policy Work?

A money back insurance policy typically has a fixed policy term, during which the policyholder pays regular premiums. The policyholder is entitled to receive a percentage of the sum assured as survival benefits at specific intervals, usually every few years. At the end of the policy term, the remaining sum assured, known as the maturity benefit, is paid to the policyholder.

Did You Try This: HRA Calculator Online

Choosing the Best Money Back Policy

Assess Your Needs

Before selecting a money back policy, it is essential to assess your financial goals, risk appetite, and the amount of coverage you require. This will help you choose a policy that aligns with your specific needs.

Compare Policies

Research and compare different money back policies offered by various insurance providers. Look for factors such as premium rates, policy term, survival benefit percentages, and claim settlement ratio to make an informed decision.

Read the Fine Print

Carefully read the policy documents, terms, and conditions to understand the policy's features, exclusions, and claim settlement process. This will help you avoid any surprises or misunderstandings in the future.


*Tax benefits are as per the Income Tax Act, 1961, and are subject to any amendments made thereto from time to time
The article is meant to be general and informative in nature and should not be construed as solicitation material. Please read the related product brochures for exclusions, terms and conditions, warranties, etc. carefully before concluding a sale.
Make responsible financial decisions. Consult with your financial advisor before making any decisions on insurance purchase.

Suggested Plans

Bharti AXA Life Smart Invest Guaranteed Plan

  • A Non-Linked, Non-Participating, Life Insurance, Individual Savings Product
  • Guaranteed Financial Returns (Provided policy is in force and all due premiums have been paid)
  • Option to choose from 2 plan variants
  • Flexibility in Policy Term/Premium Payment Terms

Bharti AXA Life Shining Stars

  • Non-linked, non-participating limited pay endowment Life Insurance plan
  • Designed to take care of the financial needs of your child.
  • Flexibility to opt between 2 Maturity Payout Options
  • Flexibility in Policy Term/Premium Payment Terms
  • A great short-term investment option for a child insurance policy.

Bharti AXA Life Super Series

  • A non-linked non-participating individual life insurance savings plan
  • Range of investment duration and returns
  • Guaranteed money back benefits (provided policy is in force and all due premiums have been paid)
  • Income tax benefits (as prevailing tax laws in India that are subject to changes)