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Money-Back Life Insurances

Aside from typical life insurance, which is only paid in the form of a death benefit, some life policies offer a distinctive approach by having an additional investment element. The investment element (also called cash value) means that the insured can increase the price of the premiums paid to the insurance company. This supplemental portion added to the premium, called surplus, is ultimately invested in other businesses, along with the added portions of other policyholders. Money-back life insurance belongs to this broad category of insurance. They are permanent life policies with cash value. If you want to solder your investment and life insurance in one piece, this is an option worth considering.

In the case of money-back life insurance, the benefit that comes from the investments is issued in the insured’s account as a bonus and is added to the insured sum of money. Taking into account that sometimes even specialists cannot guarantee the success of an investment, since they cannot foresee the economic evolution, this type of insurance does not mean that you are granted an instant profit. That is why money-back insurance is especially advantageous in the long term and is not a safe option for short periods of time. Despite this, they are more flexible and favorable options than other cash value insurance. For example, compared to endowment policies, which only allow access to the savings account after the end of the term (after the death of the policy holder), money-back insurance gives the option to withdraw money during the term for personal purchases (with respect to, for example, home improvements or travel). The insured can even sign up to receive the bonuses on a regular basis, thus ensuring Surety Bonds  a supplementary source of income if there are benefits. Also, what makes money-back insurance even more attractive is the fact that the benefits are not taxable.

Still, some experts say there are other more reliable and efficient investment methods, claiming that the cash value component should not be mixed with insurance. This creates real confusion among potential customers, as they do not know if it would be better to opt for normal life insurance and invest the money in other activities. However, if you subscribe to cash-back life insurance and your policy has a deficit that you cannot pay, you can sell the policy with the help of an advisor. Although this is unlikely to happen in the long term, keep in mind that selling the policy can be a complicated and expensive process.