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Should I buy Max Life Monthly Income Advantage Plan?

Money back policies are highly expensive, they mostly don't offer adequate insurance cover and they don't offer good returns

Please review Max life monthly income advantage plan. As per the agent, I have to pay ₹2 Lakh per annum for 12 years. On completion of 10 years, I will get ₹22 lakh as lump sum and from 13th year onwards I will get ₹23000 per month up to 10 years. Should I buy this or not?
- Pavan Talwani

Max Life Monthly Income Advantage Plan is a traditional money back policy. Money back policies are similar to endowment insurance plans where the policy provides for partial survival benefits during the term of the policy.These type of products are expensive, they mostly fail to offer adequate insurance cover and they don't offer good returns. What the agent has told you isn't correct. In this policy, the money back is in the form of regular income after completion of 10 years. At the end of premium paying term, you will get a guaranteed monthly income for 10 years which will be 1/12th of 10 percent of the sum assured. So for instance, if your sum assured is ₹10 Lakhs, then the guaranteed monthly income will be ₹8333 (100000/12). The reversionary and terminal bonuses mentioned are not guaranteed. You will pay a very high premium of ₹2 lakh a year. If you are looking for regular income then you should invest this amount in a pure investment product to earn better returns.

Always keep in mind that you mustn't mix insurance and investment. For securing a life insurance cover, buy a pure term policy. And invest in equity mutual funds to achieve long-term financial goals of five years and above. If you are a newcomer to the stock market, choose a top-rated balanced scheme and start investing every month via a Systematic Investment Plan (SIP). If you are familiar with the stock market, you can invest in a diversified equity scheme. You must continue with your SIP investments irrespective of the market conditions. This will help you to average your purchase cost and enhance your returns.

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