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When looking for investment options in India, most people consider traditional life insurance policies to create a corpus of funds. But what happens when the tenure is over? A financial emergency can arise at any time that requires funds to tackle it. But a conventional life insurance plan will only help when the policyholder passes within the policy term.
Even though some of these plans may allow you to take a loan against your policy, but what if it is not enough? The good news is that there is a plan that gives you the benefit of a lumpsum amount during the policy tenure. It is known as the money back policy

A money back plan will provide you the liquidity you need to stay afloat during financial emergencies. In this article, we will discuss how the plan helps and why you need to add it to your financial portfolio.
What is a Money Back Policy?
A money back policy, as the name suggests, offers a certain percentage of the sum assured at certain intervals as the survival benefit. These benefits will be paid to you during the tenure and the remaining balance is paid at the time of maturity along with vested bonuses. However, should something happen to you during the tenure, the full sum assured will be paid regardless of the survival benefits that have already been released. Here are some of its features:
-        The survival benefit is calculated as a percentage of the sum assured in your policy document. These benefits are paid at a regular fixed interval. However, the pay-out structure and the percentage of sum assured varies from plan to plan.
-        At the time of maturity, the maturity benefit minus the survival benefits already paid will be paid to the policyholder.
-        These plans are participating plans that are usually supplemented with bonus as per the plan’s performance. The accrued bonuses are paid upon death or maturity.
-        You can also supplement your money-back policy with riders. Rider benefits are paid as a lumpsum amount when the contingency it covers occurs during the policy period.
Benefits of a Money Back Policy
There are several benefits of investing in a money back plan, such as death benefit, survival benefit, and maturity benefit. This amount is paid along with bonus accrued during the policy term. This bonus will depend on the insurer’s performance during the policy duration. Therefore, it is important to look at all the components that make up the policy in order to choose the best one. 

Let us discuss the benefits in detail:
-        Survival Benefits
During the course of the policy, the money will be paid to the policyholder after every few years as determined by the policy document at the time of investment. You start getting paid after some years of the start of the policy and continue till it reaches maturity.
-        Death Benefits
The policy nominee will get the death benefit if the insured person passes away during the policy duration. The amount will include the policy sum assured as well as the bonus accumulated until that time. However, it does not include the survival benefit as they are only offered if the insured person outlives the term.
-        Maturity Benefit
The insured person will receive this benefit from their money back plan upon maturity. They will receive the sum assured that the policyholder chooses at the start of their policy along with the reversionary benefits accrued during the policy tenure. The latter will depend on the insurance company’s performance. Therefore, it is important to invest in a robust insurer with a solid track record.
-        Liquidity
The liquidity feature of the money back policy makes it unique and a preferable investment plan. The survival benefits paid during the policy duration offer you liquidity to meet your short-term goals and also plan your finances to fulfil financial requirements at various life stages.
-        Risk-Free Return
If you prefer risk-free investments with money back guarantees, then money back plan is the perfect option for you. There is no risk involved and you receive assured returns.

When everything is going smooth, we don't consider investing our money in instruments that lock our liquidity away for many years. But when you are faced with a financial emergency, it is these instruments that come to your rescue.
Financial experts recommend building a corpus of funds through investment instruments, like money back policy, that help you manage your finances and also give you the peace of mind that your money is in safe hands. 

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