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Money Back Policy

Money Back Policy is a type of life insurance plan, which serves as an investment plan as well as a life insurance product. ...Read More


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Money Back policy
Francis Rodrigues Francis Rodrigues

Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.

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Vishal Subharwal Vishal Subharwal

Vishal Subharwal heads the Strategy, Marketing, E-Commerce, Digital Business & Sustainability initiatives at HDFC Life. He is responsible for crafting and ensuring successful implementation of the overall organisation strategy.

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What is a Money Back Policy?

image-star image-star image-star image-star image-star image-star image-cloud image-cloud image-cloud moon What is a Money Back Policy?

A Money Back Policy is a life insurance plan which offers dual benefits to the policyholder. It offers the benefit of financial cover as well as investments. A money back policy can help you to generate income at regular intervals throughout the policy tenure. With it, a policyholder gets to provide financial security to his or her loved ones in the event of death or accident while not making any losses when no claims are made.

Why Do You Need a Money Back Policy?

Why Do You Need a Money Back Policy?

A money back policy is one of the best long-term investment plans available in the market. Here are some of the reasons stating its significance:

- It is a combination of insurance and investment which means it enables the policyholder to earn some income at regular intervals along with a death cover in the event of the policyholder’s unfortunate death.

- It enables the policyholders to receive guaranteed returns on their investments and at the same time multiply wealth through various investment plans.

- Moreover, the assured annual pay-outs and the life insurance coverage help in making excellent choices in income and security.

- Policyholders can invest in various types of money back plans depending on their life stage when he or she is making an investment. For example, if you avail a child insurance plan, it can help to cover your child’s education.

What are the Key Features of Money Back Policy?

Money back policy has several features that prove to be beneficial for your financial goals:

Guaranteed Returns

Guaranteed Returns

Low-risk, non-linked money-back policies offer guaranteed returns at regular intervals.

 Life Coverage

Life Coverage

These policies help you secure your family’s future with the sum assured. Your loved ones receive the payout if anything happens to you.

Bonus and Additions

Bonus and Additions

Many policies offer bonuses, enhancing the policy’s value over time.



You can choose a policy that aligns with your financial goals.

Regular Pay-outs

Regular Pay-outs

A money back policy allows a policyholder to earn period pay-outs at regular intervals throughout the policy tenure.

Survival Benefit

Survival Benefit

Survival benefits are basically periodic payouts which a policyholder receives at the end of the tenure.

Maturity Benefit

Maturity Benefit

Apart from survival benefits, these policies provide a lump sum payout as a maturity benefit.

Death Benefit

Death Benefit

It also provides a death benefit to the beneficiaries or nominees of the policyholder in the event of an unfortunate demise of the policyholder.

Guaranteed Surrender Value

Guaranteed Surrender Value

Also the policy allows a guaranteed surrender value in case a policyholder decides to discontinue the policy within the given tenure.

Income during the Policy Term

Income during the Policy Term

It ensures the policyholder gets to earn guaranteed returns at a regular interval throughout the policy tenure which acts as a second source of income.

Add-on Riders

Add-on Riders

You can also add riders over and above the base policy such as accidental death cover, critical illness cover, etc

Tax savings

Tax savings

Tax benefits on life insurance applicable under deductions under 80C and section 10(10D) you can save tax on premiums paid and maturity amount.

What are the Benefits of a Money Back Policy?


Guaranteed Returns on Investments

A money back policy allows you to generate assured returns throughout the policy tenure.


Additional Bonus Benefits

Many policies offer enhanced returns through bonuses when you pay premiums over several years.


Tax Benefits

These policies offer tax benefits under Section 80C2 and Section 10(10D)2 of the Income Tax Act.


Provides Financial Security

It secures the financial future of your loved ones when you cannot provide for them.


Savings for a Specific Goal

It allows you to plan out your finances in advance and helps you to achieve specific objectives


Provides Life Insurance Cover

Apart from its investment benefits, it also provides life insurance cover to the policyholders.


Offers Sum Assured

It provides the beneficiaries a fixed sum assured which is payable in multiple pay-outs at regular intervals.


Provides Liquidity with Regular Pay-outs

The sum assured chosen by the policyholder is paid out in regular intervals throughout the policy tenure which provides liquidity to the policyholder.


Comes With a Low-Profile Risk Instrument

The risk factor associated with this type of investment is considerably low as it is not market-linked and the returns are guaranteed.

Benefits of Money Back Policy Benefits of Money Back Policy

Money Back Policies Offered by HDFC Life:

Understanding Money Back Plan with an Example

Let us understand how a money back policy works with the help of an example. Say for instance Mrs Rinika Mukherjee, a working lady avails a child money back policy. Assuming that the age of her child is 12 years, she purchases a policy with a sum assured of Rs. 30 lakh with a tenure of 25 years.

Hence, Mrs Mukherjee will have to pay a premium throughout the policy tenure. According to the policy, she will receive a survival benefit of 25% of the total sum assured after every 5 years. 

Upon maturity, she will receive the last 25% of the sum assured along with any bonus if applicable. The sum assured will be paid out in multiple installments in the 5th, 10th, 15th, and 20th year and the last 25% will be paid in the 25th year along with bonuses if applicable.

In case of her unfortunate death any time within this period, her child will receive 100% of the sum assured amount plus all accrued bonuses. This is on top of any and all survival benefits already availed.

Eligibility Criteria for Buying Money Back Policy

Here are the eligibility criteria required to apply for a money back policy, which are as follows:


The age of the individual should be a minimum of 18 years and a maximum age of 55 to 65 years. Usually, the age bracket varies from insurer to insurer.


The individual should also have a stable income flow and must be capable of paying the insurance premium on time.


The policy term can be anywhere from 10 years to 25 years, but it cannot go beyond the maximum permitted age.

Documents Required to Buy Money Back Policy

Listed below are the documents required to buy a money back policy:


Age proof: Any one of the following can act as an age proof- PAN card, voter ID card, passport, Aadhaar card, driving licence



Address proof: Any one of the following can act as an address proof: Voter card, passport, Aadhaar card, driving licence, ration card or any utility bills



Income proof


Medical reports or certificates, doctor’s prescription


Policy application form carefully filled

Child Money Back Plan

It is a kind of money back plan specially designed which makes use of survival incentives to cater to the financial requirements of growing children. Some of the education requirements can include higher education expenses, studying abroad expenses, marriage and various other factors depending on the child. 

Moreover, it is a combination of investment and insurance which enables policyholders to secure his or her child's future along with assured return on investment. This dual benefit plan becomes beneficial and provides a sense of security to policyholders.

What are the riders available with Money Back Policy?

You can also add riders over and above the plan money back policy some of which are as follows:


Waiver of Premium

It allows the policyholder the facility to waive off their premium payment under several circumstances.


Accidental Death Rider

In case of an accidental death of a policyholder, this rider provides a death benefit to the policyholder's beneficiaries.


Terminal Illness Rider

This rider enables the policyholder with assured cash if he or she is diagnosed with a terminal illness such as heart attack, stroke, kidney failure etc.


Hospitalisation Rider

It provides the policyholder financial assistance when he or she is hospitalised and provides cover for eligible treatments.


Accelerated Sum Assured

If the Life Assured, or if more than one Life Assured the first to become critically ill of the Lives Assured, becomes critically ill by suffering one of the illnesses defined , a sum as specified in the Policy Schedule shall be payable.


Critical Illness Rider

A critical illness rider financially empowers you to get the best possible treatment without worrying about costs, in case the Life Assured is diagnosed with a Critical Illness.

How to Choose the Best Money Back Policy?

Here are some of the key parameters which must be taken into consideration to choose the best money back policy.


Financial Goals

The first and foremost thing to consider is your financial goals. This can include goals like buying a house, planning an expensive vacation, funding children's education, etc. Based on your medium and long-term financial goals, you can choose the most appropriate plan.



Based on certain factors like the standard of living of your family, living expenses, your contribution to the total family income, etc., you should determine the sum assured amount. This amount has to be enough to cover your family’s immediate and long-term needs.


Policy Term

It is important to read the terms and conditions of a money back policy before finalising the same. There can be various exclusions in the policy which are not displayed at the forefront while advertising. It is best to read through all the terms and conditions to know the consequences of various situations you may face.


Premium Amount

It is also another crucial factor to consider and you must choose the amount of premium in such a way that it does not feel like a financial burden to you.



Some of your insurance requirements may not be covered in the base policy such as critical illness coverage, accidental death cover, etc. Therefore, choose riders wisely over the base policy based on your financial needs and affordability.


Company's Claim Settlement Ratio

Consider checking the claim settlement ratio of the insurance company. It is a figure denoted in percentage which reflects how many claims it has settled out of 100. Hence, the higher it is the more the chances for the policyholder that the claim will be settled.

Benefits of Buying Money Back Plan from HDFC Life Insurance

When you avail a money-back plan from HDFC Life Insurance, you can enjoy assured advantages, including:

- No commission fees

- Access to expert advice at no additional cost

- Transparent process with no hidden charges

- Genuine transactions without any spam calls and all phone call conversations from HDFC are recorded for 100% transparency.

- The reliability of an insurer with a death claim settlement ratio of 99.5%##.

Factors to Consider while Purchasing a Money Back Policy

Listed below are some of the factors to keep in mind while purchasing a money back policy:


Understand the Features

Make sure that you understand all the features of the policy properly. In case you find any difficulties, you can reach out to our advisors by requesting a call back from our website. They will explain to you the details and resolve your queries.



You must choose the amount of premium in such a way that it does not feel like a financial burden. Also, many insurers offer the flexibility of multiple premium payment options like monthly, quarterly, semi-annually or annually. Make sure to pick a plan that provides the best value for your premium.


Evaluate the Returns

After finalising the sum assured and choosing the premium amount, determine the returns you will receive as money back. You can reach out to our advisors by requesting a call back from our website.  Knowing these beforehand can help you make an informed decision.


Check the Exclusions

It is always recommended to check for the exclusions of a policy as some companies do not explain such things upfront while promoting their insurance products. There can be several exclusions in the base policy but you can opt for a rider to get additional benefits.


Financial Goals

It is extremely important to consider your financial goals and objectives before availing of a money back policy. Identify the objective and choose the policy based on it.


Sum Assured

It is an amount which is paid to the family member or beneficiaries of the policyholder in the event of the unfortunate demise of the policyholder. Hence, it is one of the crucial aspects to consider when choosing a money back plan.


Additional Benefits

There can be some additional benefits like bonuses and other perks which makes it a lucrative deal for the policyholder. Hence consider what riders you are allowed to add to your base policy. 

Why Buy a Money Back Plan from HDFC Life Insurance?

With a Money Back Plan from HDFC Life, you can get periodic income and life insurance coverage from one of India's leading insurance companies. Plan your family's future by opting for one of the individual or group insurance plans that meet all your needs.

Why buy term insurance, from us? Check the reasons:

  • We have settled 99.5%## of all individual claims.

  • All claims are processed within 24 business hours

  • Flexibility in the choice of benefits

  • Tax savings on premiums and maturity benefits

  • Child plans to fulfil all your little one’s dreams

Live a stress-free life by choosing one of our money back plans!

Comparison between Fixed Deposit (FD) and Money Back Policy

Here is the comparison between a fixed deposit and a money back policy demonstrated in a tabular form, based on certain parameters.


Fixed Deposit

Money Back Plan

Investment Type

FD is a fixed investment option offered by banks, under which it accepts deposits and provides stable returns.

It is a type of life insurance plan which provides life coverage along with a regular pay-out.


Fixed-rate of interest

There are no such interest rates but the returns are assured

Policy Term

Tenure ranges from 7 days to 10 years offering flexibility to the customers

It is usually available for a longer period. It can range from 10 to 30 years

Investment Required

Minimum investment ranges from Rs. 1,000 to Rs. 5,000 with no upper limit

The amount of premium depends on certain factors such as the sum assured, riders, age, etc.

Pay-out Mode

Lump sum pay-out upon maturity

Pay-outs take place at regular intervals


Premature withdrawals are allowed by a penalty on interest levied

Withdrawals are allowed before the policy maturity but it varies from insurer to insurer

Tax Benefits

Except for tax-saver FDs. they are not eligible for tax deductions 

All plans are eligible for tax benefits under Section 80C and 10(10D) of the IT Act.

Is Money Back Policy a Good Investment for You?

A money back plan can always be the perfect investment if you are looking to invest in low-risk savings that provide life insurance coverage. These are safe long-term savings plan which primarily invest in debentures of private entities and government bonds.

It is even more liquid than a typical long-term debt investment because of its money back feature which provides a stable return in a fixed interval. Utilise it to establish a reliable source of tax-free income. At the same time, it also serves as an ideal tool for transferring wealth.

As it carries very low risk compared to a mutual fund, it can be one of the best life insurance plans for a conservative investor with a secured return on investments along with tax benefits. All these as a whole make a win-win situation for the investor as well as for his or her beneficiaries.

FAQs on Money Back Policy

1 What is a money back policy?

A money back policy is a form of life insurance which offers dual benefits to the policyholder. Along with providing a life cover, it also provides fixed returns in intervals. Hence, a person can enjoy stable returns along with a sense of security as it offers death benefits to his or her beneficiaries.

2 What are the features of a money back policy?

Some of the key features of a money back policy are- low-risk investment, regular income source, survival benefit, death cover, surrender value, add-on riders.

3 What are the advantages of a money back policy?

Some of the primary advantages of a money back policy are- financial security, guaranteed returns, regular payouts, savings for specific goals, etc.

4 Is money back policy taxable?

The amount received as periodic payouts is generally not taxable. However, it’s advisable to consult a tax advisor to understand your tax liability.

5 Is it risky to invest in a money-back policy?

Money-back policies use compounding interest to provide returns and savings. These policies are generally not considered risky.

6 Is there a penalty if I do not pay my premium for the money-back policy on time?

Failure to pay timely premiums may lead to policy lapse or discontinuation. It’s crucial to adhere to the premium payment schedule to avoid such situations.

7 Who is most suitable to buy a money-back policy?

Money-back policies work best for individuals who want insurance coverage and periodic returns. They are particularly beneficial for those with specific financial goals in mind.

8 What are the riders available in a money back policy?

Typically, you can opt for accidental death, critical illness, and disability riders3 with your money-back policy.

9 Can I revive my money back policy?

Yes, most insurance companies offer a revival period during which you can reinstate a lapsed policy by paying the outstanding premiums and fulfilling certain conditions.

10 How do I surrender my money back policy?

Some individuals may choose to surrender the policy before maturity. They can contact the insurance company directly to receive the necessary paperwork.

11 How frequently am I required to pay the premium for a money back policy?

The premium payment frequency can depend on the insurer. Some insurers offer you the flexibility of monthly, quarterly, semi-annual or annual premium payments.

12 What happens if I fail to pay my money back policy premium on time?

If you fail to pay the premium amount for a money back policy within the grace period, there will be a policy lapse. When this happens, the perks and benefits of the policy will cease.

13 Is a money back policy a good investment?

Yes, it can be a perfect investment option for a conservative investor whose risk appetite is low as it pays out stable and assured returns on a regular interval. Also, it is not linked with the market.

14 How do I transfer my money back policy?

Transferring a money back policy is not possible as of now. However, you can surrender your existing policy and receive an assured surrender value.

15 How are returns calculated on your money back policies?

Money back policy returns are typically calculated by considering factors such as the premium amount, policy duration, and the assured sum.

1. Guaranteed Benefit is paid on survival during policy term provided all due premiums are paid during the premium payment term.

2. Tax benefits are subject to conditions specified u/s 80C and u/s 10(10D) and other provisions of the Income Tax Act, 1961. Tax Laws are subject to change from time to time.

3. For all details on Riders, kindly refer to the Rider Brochures available on our website.

HDFC Life Sanchay Plus (UIN:101N134V22) is a non-participating, non-linked savings insurance plan.

HDFC Life Sanchay Fixed Maturity Plan (UIN:101N142V04) is a Non-Linked, Non-Participating, Individual, Savings, Life Insurance Plan. Life Insurance Coverage is available in this product.

HDFC Life Guaranteed Income Insurance Plan UIN: (101N146V04). A Non-Linked Non-Participating Individual Life Insurance Savings Plan

##As per the number declared in the investor presentation. View here.

ARN - ED/02/24/8578