Canara Money Back Advantage Plan

What is the Canara Money Back Advantage Plan?

The Canara Money Back Advantage Plan is a life insurance plan offered by Canara HSBC Life Insurance that ensures your family's financial security with life coverage and milestone-based payouts. You receive guaranteed cash at set intervals and a lump-sum payout upon maturity. 

It is a non-linked participating plan, where the returns are not linked to the market performance but are based on the company's profits.

Features of Canara Money Back Advantage Plan

• Death Benefit Protection: Receive a payout for your family if the policyholder passes away within 16 years.

• Flexible Payment Schedule: Pay premiums for just 10 years to meet your budget and preferences.

• Guaranteed Cash Returns: Get three payouts of 15% of the sum assured at the end of the 5th, 9th, and 13th policy years if you're still alive.

• Maturity Benefit: At the end of the policy, receive a guaranteed lump sum equal to 55% of the sum assured, along with any accrued bonuses.

• Premium Discounts: Enjoy lower premiums when you opt for a higher sum assured.

• Tax Advantages: Benefit from tax relief on premiums paid and payouts received, according to the Income Tax Act, 1961, including Sections 80C and 10(10D).

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Eligibility Criteria of Canara Money Back Advantage Plan

This investment option is offered by Canara HSBC Life Insurance with the following eligibility conditions:

Benefits under the Canara Money Back Advantage Plan

Some of the key benefits offered by the Canara Money Back Advantage Plan are listed below:

Survival Benefit: You will receive guaranteed money back payouts at set intervals, provided all due premiums are paid.

• 5th Policy Year: 15% of the Sum Assured

• 9th Policy Year: 15% of the Sum Assured

• 13th Policy Year: 15% of the Sum Assured

Maturity Benefit: If you survive to the end of the policy term and have paid all due premiums, you'll receive:

• 55% of the Sum Assured as Guaranteed Sum Assured on Maturity.

• Any accrued simple reversionary bonuses.

• Any applicable terminal bonus.

• After this payout, the policy ends.

Death Benefit: If you pass away during the policy term and have paid all due premiums, your nominee will receive the greater of:

• Sum Assured on Death, plus any accrued simple reversionary bonuses, interim bonuses, and terminal bonuses, if applicable.

• 105% of the total premiums paid (excluding underwriting extra premiums).

• The Sum Assured on Death is the higher of:

  • 10 times the annual premium, or

  • The Sum Assured.

NOTE: 
– If you have received survival benefits, they won't be deducted from the death benefit.
– Once the death benefit is paid, the policy ends with no further benefits.

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Bonuses:

• Simple Reversionary Bonus:

  • Added to the policy if premiums are paid on time.

  • Expressed as a percentage of the Sum Assured.

  • Declared at the end of each financial year based on the with-profit fund's performance.

  • Once declared, it becomes part of the guaranteed payout.

• Terminal Bonus:

  • It may be declared at maturity, depending on the with-profit fund's performance.

NOTE: The bonuses are not guaranteed and are at the discretion of the company, so they may vary.

Paid-Up Status: A life insurance policy can enter "Paid-Up" status if premiums are not fully paid but at least the first two consecutive years' premiums have been paid.

• Once a policy is "Paid-Up":

  • It is still valid but has reduced benefits.

  • You do not earn any new bonuses.

  • It can be revived within 5 years from the first unpaid premium.

Benefits of a Paid-Up Policy:

• Survival Benefit:

  • If the policy reaches specific milestones, you receive a percentage of the "Paid-Up Sum Assured."

  • This happens at the end of the 5th, 9th, and 13th policy years, with 15% of the Paid-Up Sum Assured paid each time.

  • The "Paid-Up Sum Assured" is calculated by multiplying the original Sum Assured by the ratio of premiums paid to total premiums due.

• Reduced Maturity Benefit: Upon policy maturity, you receive:

  • Paid-Up Sum Assured on Maturity.

  • Any bonuses accumulated before the policy became paid up.

  • This amount is reduced by any survival benefits already paid.

• Reduced Death Benefit: If the policyholder dies, the nominee gets:

  • Paid-Up Sum Assured on Death.

  • Any bonuses accrued before the policy went paid up. 

This amount is also reduced by any survival benefits already paid.

High Sum Assured Rebate:

If the policy's Sum Assured is ₹200,000 or more, you can receive a rebate on the premiums payable.

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Policy Details of Canara Money Back Advantage Plan

• Surrendering the Policy: Surrendering the policy means you cancel it before its term ends.

  • It’s generally not recommended, as it may lead to a loss of benefits and value.

  • If you must surrender, be aware it might not yield the expected financial benefits.

• Lapse: If you miss premium payments during the first two years and don't pay within the grace period, your policy lapses. This means the insurance coverage ends, and you won't get any benefits upon death or at maturity.

• Paid-Up Status: If you've paid premiums for at least two consecutive years, the policy becomes "paid-up" if you don't pay within the grace period. You'll still receive some benefits upon death or maturity, but at a reduced level compared to an active policy.

• Revival Options: You can revive a lapsed or paid-up policy within five years from the first missed premium date by paying all overdue premiums with interest. After revival, your benefits are reinstated to the original level.

• Grace Period: You have a grace period of 30 days for annual payments and 15 days for monthly payments to make up for missed premiums. If you don't, the consequences mentioned above apply.

• Free Look Period: You have a "free look" period of 15 days (30 days for distance marketing) after receiving your policy document to cancel the policy. If you cancel within this time, you'll get a refund of your premiums minus certain deductions like the cost of insurance coverage, stamp duty, and any medical expenses.

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How Does the Canara Money Back Advantage Plan Work?

Step 1- Purchase the Plan:

• Choose a sum assured amount, which is the death benefit paid to your beneficiary if you die during the policy term.

• Decide on the policy term, which is the duration for which you'll pay premiums and the plan will be active.

• Pay the initial premium to activate the policy.

Step 2- Guaranteed Money Back Payments:

• Throughout the policy term, you'll receive regular payouts at predetermined intervals as a percentage of the sum assured.

• These payouts are guaranteed, meaning you'll receive them regardless of the plan's performance.

Step 3- Maturity Benefit: Upon surviving until the policy maturity date, you'll receive a lump sum amount. This benefit consists of:

• A guaranteed amount equal to 55% of the sum assured.

• Any accrued simple reversionary bonuses.

• A terminal bonus, if applicable.

Step 4- Bonuses (potential): The plan is a participating policy, which means you might be eligible for bonuses if the insurer performs well. These bonuses can include:

• Simple reversionary bonuses: Added to the maturity benefit and grow with a fixed interest rate.

• Terminal bonus: A one-time bonus paid at maturity.

Step 5- Death Benefit:

• If you pass away during the policy term, your beneficiary will receive the full sum assured amount.

• The guaranteed survival benefits (money-back payouts) already received won't be deducted from this death benefit.

Step 6- Policy Termination:

• The policy terminates after the maturity benefit payout or upon receiving the death benefit.

• No further benefits are payable after termination.

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Suicide Exclusion of Canara Money Back Advantage Plan

• If the policyholder dies by suicide within the first year (12 months) from the policy start or revival, the beneficiaries will not receive the full death benefit.

• Instead, the payout will be limited. The exact amount depends on the policy terms, but it typically consists of premiums paid till death.

• After one year (12 months) from the policy start/revival date, suicide exclusion is lifted. If the policyholder dies by suicide after this period, the death benefit as per the policy terms will be paid.