Author: nilkanthadvisory.com

How Does A Money Back Policy Work? In the case of the life insured's death, a standard insurance plan pays out a lump sum amount to the nominee of the policy. This is known as the death benefit of life insurance. On the other hand, a money back policy is a form of life insurance policy that allows the insured to receive a portion of the sum assured at regular intervals rather than a lump sum at the end of the policy period. As a result, a money back insurance policy is an endowment scheme with certain liquidity.The amount that is received as payouts with it is known as the ‘Survival Benefits’. These are compensated over the policy term, and the remaining sum assured is paid at maturity, along with any vested incentives. Why Do You Need to Buy Money Back Policy? Here are some reasons that make money back policy suitable for you: Money back plans combine the benefits of an insurance policy with that of investment, meaning that the policy earns an income for the policyholder rather than simply delivering a lump sum in the event of his or her death. These policies include a guaranteed return on investment, as well as annual payouts and insurance coverage, making them an excellent choice for those seeking both security and income. As a result, policyholders receive a stable and guaranteed return on investment, as well as the ability to increase their wealth through investment opportunities. Depending on your life stage, when you invest, the different types of money back, plans can be smart. For instance, a child money back plan can help you secure their future wisely. Benefits of Money Back Policy Let’s take a look at some valuable benefits of a money back policy: 1. Survival Benefit Over the…

Endowment Plan - Meaning, Types and Benefits   A life insurance policy is the best avenue to secure the financial future of your loved ones. A combination of life coverage and investment offers the best financial safety net for your family, something you can get from an Endowment policy. It also helps build a corpus to fulfil your financial goals, like creating an asset, meeting the education expenses of your children, and more.  However, before you opt for an endowment plan, it is imperative to know what is endowment policy. An endowment plan meaning is life insurance plan that offers both death as well as maturity benefits. The beneficiaries receive the sum assured by way of the death benefit if the policyholder expires during the policy term. On the other hand, if the policyholder survives the term, they will get a lump sum amount by way of maturity benefit. What is Endowment Policy? A life insurance plan that offers both life coverage as well as provides returns for the investment made by way of periodical premiums paid by the policyholder is the endowment policy meaning. Investment in an endowment policy means building a corpus for future requirements while creating a financial safety net for your family. Different policy options are available to cater to different needs, but the endowment policy is the most popular owing to the dual benefit it offers, which is flexible premium payment options.  How Does an Endowment Policy Work? After understanding what is endowment plan is, you should also be aware of how it works before you contemplate investing in one. An endowment plan provides both life coverage and also helps in wealth creation. It provides financial security for your family by way of death benefit and helps your savings grow by way of returns on the premiums paid.  Flexibility in premium payment modes is the advantage of an…

Unit Link Insurance Plan (ULIP) ULIPS or Unit Linked Insurance Plans help you to serve two goals in a single product: investment and insurance. It provides you with a life cover and also lets you reap the benefits of the stock market, debt funds, or both, as the case may be. ULIPS has come a long way since its inception in 1971. The first ULIP was introduced by the Unit Trust of India (UTI) in 1971 and then by Life Insurance Corporation (LIC)  in 1989.  How Does ULIPS Work? ULIPS are products that provide you with a combination of a life insurance policy and also an investment opportunity through a mutual fund in a single plan.  ULIPS are provided by life insurers, so your payments to these companies when you buy a ULIP plan are called ‘premiums’ as primarily ULIPS are more similar to insurance plans. A portion of your premium is diverted towards the investment bit, which is the mutual fund portion: equity, debt, hybrid, or as the case may be.  There are fund managers who look after your investments. You are also allowed to switch between different types of funds to make the best ULIP plan for yourself. What is the Lock-in Period of a ULIP? A ULIP insurance plan comes with a lock-in period of five years. However, ULIP being a combination of a life insurance policy and a mutual fund, both of which are long-term investments, should be held for 15 years or more. What are the Costs associated with ULIPS  There are mainly 5-6 charges associated with a ULIP- Premium Allocation Charges These charges are deducted upfront from your premium payment. An upfront deduction means that before your ULIP investment gets apportioned between the insurance and investment bit, some money is deducted as premium allocation…