How to Increase the Returns from Your Money-Back Life Insurance Plan?

If there have been how to extend the returns from a money-back plan, every investor would definitely choose it. Well, there are a couple of ways through which we will increase the return rate or get higher and better returns from a money-back policy. A money-back policy is opted for by the people that need regular incomes from the policy to hide their time to time huge expenditures. it’s suitable for people with short-term goals. it’s also opted for by people that invest in stocks just to save lots of a minimum of some of their savings.

It offers lower returns than other life assurance policies due to some very valid reasons. The key reasons for the low return rate are as follows –

When compared to other life assurance plans, the premium of a money-back plan is far higher.
The bonus is lower in money-back plans in comparison to an endowment plan.
A money-back plan offers payouts at certain frequencies. the cash obtained from these payouts is usually used for fulfilling short-term goals and planned expenditures. Hence, it doesn’t earn returns.
Ways to extend Returns from Your Money-Back plan
There are some effective ways to extend the return rate from your money-back policy. Now, if you re-invest during a fixed income or an equity investment rather than using it for expenditure(if not necessary), you’ll be ready to earn a better rate of returns.

There are 3 ways to re-invest. These 3 ways are –

Fixed Income
If you re-invest the cash you get paid regularly from your money-back plan in fixed income plans virtually, there’s no risk. this is often because the bonds offered are tax-free bonds. These bonds are backed by the govt and have good credit ratings. This strategy, however, doesn’t beat the return rate of an endowment plan.

Hybrid Investments

Balanced funds are hybrid debt and equity funds. they are available with 60-70% of the portfolio invested in equities and therefore the remainder of the quantity invested in fixed-income securities. the general risk of the portfolios is relatively lowered. If a touch amount of risk is ok with the life assured, there are excellent leads to the past on returns. The return rates are observed to even reach 15% higher. By re-investing in hybrid plans like balanced plans, you’ll reach higher rates of returns. during this strategy, we will see that the return rate of an endowment plan has also been beaten. It is, however, important to settle on top-performing balanced funds so as to urge higher return rates which will beat the return rates of endowment plans too.

High-Quality Diversified Equity Funds

In this strategy, we’ve chosen high-quality diversified equity funds to re-invest in. it’s observed that the return rates of re-investing in these high-quality diversified funds are much higher and at 13% excess. This strategy of re-investing beats the endowment plan return rates. it’s important to settle on top-performing funds to take a position in to urge good returns.


Money-back plans sure provide lower returns than other life assurance policies but because they pay at regular intervals and help in covering planned expenditures. If the life assured doesn’t need to use the cash for his or her expenditures, they will make a sensible move and re-invest in fixed income plans, hybrid investment options, and high-quality diversified equity funds to urge better returns and save the cash .

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