Money Back Policies in Life Insurance

Money-back policies offer a unique blend of insurance protection and periodic returns. Unlike traditional plans that pay out only at the end of the term, these policies provide regular payouts during the policy tenure, making them ideal for those seeking liquidity along with life cover. They’re handy for meeting planned expenses like education, travel, or milestones.

This blog explores how money-back policies work and whether they align with your financial goals.

Benefits of Money Back Policies in Retirement Planning

• Regular Income During Policy Term

  Money-back policies provide periodic payouts at fixed intervals, ensuring a steady income stream during your working years and helping you build a disciplined savings habit supporting long-term financial planning.

• Financial Cushion Post-Retirement

  The survival benefits and maturity payout serve as a financial buffer during retirement, offering additional support alongside your pension or savings plan to manage daily expenses or medical needs.

• Low-Risk Investment Option

  These policies offer guaranteed returns, making them ideal for risk-averse individuals who want stable, predictable income as part of their retirement portfolio.

• Insurance Protection with Returns

  In addition to providing life cover, money-back policies ensure your family is financially protected even as you receive benefits during the policy term, giving you the dual advantages of insurance and savings.

• Tax Benefits

  Premiums paid are eligible for tax deductions under Section 80C, and the returns received are generally tax-free under Section 10(10D), offering additional advantages when planning your retirement corpus.

• Helps Meet Milestone Goals

  Periodic payouts can be used to meet medium-term financial goals—like funding a child’s education or a home renovation—without disturbing your core retirement savings.

How Aviva India's Money Back Policy Works

Aviva India’s Nivesh Bima is a money-back life insurance policy that offers life cover and regular payouts. Policyholders pay premiums for a limited period—typically five years less than the total policy term. For example, with a 20-year policy, premiums are paid for only 15 years.

Every five years during the policy term, the plan pays out Survival Benefits, which are fixed at 10% of the maturity sum assured. These payouts provide liquidity to support planned expenses or unexpected needs without disrupting your long-term financial goals. At the end of the policy term, the remaining maturity amount is paid out, creating a lump sum to support retirement or milestone planning.

In case of the policyholder’s death during the term, the full Death sum assured is paid to the nominee—regardless of any survival benefits already received. You can also opt for an Accidental Death Benefit rider for added protection.

Additionally, premiums paid, and benefits received are eligible for tax benefits under Sections 80C and 10(10D), making it an innovative and tax-efficient choice for financial planning.

Key Features of Aviva Nivesh Bima Plan

• Guaranteed Benefits

  The plan offers assured payouts, including survival benefits during the policy term and maturity and death benefits if all premiums are paid.

• Regular Money-Back Payouts

  Every five years, you receive 10% of the maturity sum assured as a survival benefit, providing regular liquidity during the policy term.

• Limited Premium Payment Term

  Premiums are paid for a term that is five years shorter than the overall policy term, making it easier to manage long-term payments.

• Comprehensive Life Cover

  Offers a death benefit equal to 11 times the annualized premium, ensuring strong financial support for your family in case of an eventuality.

• Optional Accidental Death Benefit Rider

  You can enhance protection with an accidental death benefit of up to ₹30 lakh, adding another layer of security.

• Tax Advantages

  Premiums qualify for deductions under Section 80C, and payouts are usually tax-free under Section 10(10D).

• Flexible Policy Terms

  Choose from 10, 15, or 20-year terms with corresponding shorter premium payment periods.

• Wide Entry Age Range

  Suitable for individuals between 13 and 60 years of age.

• Multiple Payment Modes

  Choose from annual, semi-annual, or monthly premium payments.

Eligibility Criteria for Aviva's Money Back Policy

This plan offers flexibility across age and payment modes, making it accessible to a broad range of individuals planning for financial security.

Also Read: How Life Insurance Can Grow Your Wealth

Comparison: Money Back Policy vs. Traditional Life Insurance

This comparison highlights how money back policies are more suited for those looking to blend protection with periodic savings.

Documents Required to Buy Aviva's Money Back Policy

• Proof of Identity: Aadhaar Card, PAN Card, Passport, Voter ID, or Driving License
• Proof of Address: Utility bills, Aadhaar, Passport, Voter ID, or rental agreements
• Proof of Income: Salary slips, bank statements, Form 16, or IT returns (may vary by sum assured)
• Age Proof: Birth certificate, school certificate, passport, or PAN Card, Recent Passport-sized Photographs
• Completed Proposal Form: Accurately filled and signed application form
• Medical Reports (if required): Based on age, sum assured, and medical history

These documents ensure smooth policy issuance and help verify eligibility and insurability.

Also Read: Life Insurance vs. Term Insurance

Money Back Policy Related FAQs

Can I surrender a money-back policy before the maturity date?

Yes, you can surrender a money-back policy after it has acquired a surrender value, typically after paying premiums for at least two to three years. However, surrendering early may result in lower payouts and the loss of future survival benefits and coverage.

Is a money-back policy suitable for long-term financial planning?

Yes, money-back policies are ideal for individuals seeking periodic returns and insurance protection. They help meet medium—to long-term goals like education or travel while ensuring financial security for your family through the life cover component.

What are the tax benefits of money-back plans?

Premiums paid towards money-back policies qualify for tax deductions under Section 80C, up to ₹1.5 lakh per annum. Additionally, payouts—including survival and maturity benefits—are generally tax-free under Section 10(10D), subject to specific conditions.

What are the eligibility criteria for buying a money-back policy?

Eligibility criteria typically include a minimum entry age of 13 and a maximum of 60. Policy terms range from 10 to 20 years with corresponding premium terms, and applicants must submit valid ID, address proof, and income documentation.

Which is the best money-back policy?

The best money-back policy depends on your financial goals, age, and income. Plans like Aviva Nivesh Bima offer a strong combination of periodic payouts, life cover, and tax benefits, making them a solid choice for balanced financial planning.

AN May 65/25

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