Everybody must have heard about Insurance policies, particularly Life Insurance policies, but have you every got confused regarding which Insurance policy to buy, Money back Plans or Non-Money back Plans ?
Well, let us analyse the basic difference between both and decide which is a better option.
MONEY BACK POLICY INSURANCE
In the above type of insurance policies you get back whatever premium you have paid at the end of the policy plus accrued bonus if any, if you survive the entire term of the policy. If in between the insured person dies, then the next of the kin or the legal heir(s) will get the insured amount.
NON MONEY BACK POLICY INSURANCE
In the above type of insurance policies you will not get anything if you survive the entire term of the policy. So most of the policy takers prefer to take the Money Back Policy under the impression that if they survive they will get the money insured + bonus etc.
However, the point to be considered is the premium payable in case of MONEY BACK POLICY INSURANCE is normally more than in NON MONEY BACK POLICY INSURANCE. For eg. Suppose for a cover of 15 lakhs for 20 years if the premium payable towards Money Back Policy Insurance is Rs.1000/- per month then in case of Non Money Back Policy Insurance the premium can be less for eg. It can be Rs.600/- or so.
Considering the above situation, it is advisable to go in for Non Money Back Policy (as our main purpose of getting Life insurance policy is to protect the financial condition of our dependents). We can invest the excess premium which we would have paid if we had opted for Money Back policy. In the above example we could have opted to take Non Money Back Policy Insurance at a monthly premium of Rs.600/- and invest the balance Rs.400/- in any other suitable instruments like equity, gold, silver or Government of India Bonds.
So next time when you go in for the insurance policies keep the above points in your mind…….
Wishing all of you a safe and healthy life.
DISCLAIMER : Above figures given are for example purpose only. Please note that views expressed are unbiased and based on our personal view and as such not to be construed as specific recommendations.