In a money-back life insurance policy, the policyholder can get a certain percentage of amounts at regular intervals instead of the lump sum amount at the end of the term. It can be termed as the Endowment plan with a liquidity option. If the policyholder expires during the policy period, the entire sum assured is paid to the nominee irrespective of the benefits paid during the policy period.
These policies are structured to provide two-way benefits to an insured. The first is the survivor benefit, which is paid periodically according to the policy’s terms, usually every four or five years, and the second is the maturity benefit if the insured survives. In death, the total sum assured is paid to the insured.
A money-back policy offers the advantages of an investment scheme and insurance plan. The policyholder gets death and survival benefits. Money-back policies can be a stable source of income as pay-outs are made in periods. A policyholder can use the money-back policy to fulfill different life-stage financial goals.