Money back plans are ideal for those who are looking for a product that provides both - insurance cover and savings. You may also go in for this policy to utilize the tax-free sum of money receivable - to visit your favorite holiday destination, maybe. Or perhaps you can re-invest the amount.
In a money-back plan, you keep getting a percentage of the sum assured during lifetime of the policy. In case of the insurer outliving the term, he/she gets the remaining corpus with accrued options like bonus. In the event of his/her death before the full term of the policy, his/her nominee or legal heirs get the sum assured irrespective of the number of installments received, with accrued benefits.
Money back life insurance policies offer the dual benefits of insurance and redemption of money at regular intervals.
These policies fit perfectly in the scheme of things of traditional savings, for people who seek financial instruments that provide insurance and savings elements, coupled with low risk element and guaranteed returns.
It creates a long-term savings opportunity with a reasonable rate of return, especially since the payout is considered exempt from tax except under specified situations.