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Kotak e-Term Plan is a pure term plan that provides a high level of protection to your loved ones in your absence.
Kotak e-Invest is a comprehensive Unit Linked Life Insurance Plan that can be customized as per your goals and needs - be it protection; investment; financial security for child or retirement planning.
Kotak Guaranteed Savings Plan is a savings and protection plan that helps you achieve long-term financial goals and insurance cover against any eventuality.
Kotak Lifetime Income Plan gives you the assurance of your income continuing throughout your life and in your absence throughout the lifetime of your spouse!
The Kotak Health Shield Plan helps secure your finances in times of sudden medical expenses related to illness such as Cardiac, Liver, Neuro and Cancer (all early and major stages of illness /conditions of Cancer); along with offering protection for Personal Accident - in case of accidental death or disability.
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People are often torn between choosing a pure term plan for protecting their family and an insurance plan that gives benefits to us when we are alive. It is indisputable that there is no winner in this contest since everyone has diverse requirements and wants to invest in a scheme that meets all of them efficiently. While we all want our insurance plans to protect our family to the greatest extend, the choice between getting money back for our plan, or putting in all our premiums just so your family can stay secure in your absence is a choice we need to take once you learn about the pros and cons of both
Let’s glance at the differences between life insurance with a money-back plan and one without it so you can make the best decision possible!
Term life insurance is the most basic kind of life insurance. In the event of your untimely death during the term of the policy, the insurer pays your family a predetermined amount, ensuring that your loved ones are well cared for and have adequate financial support. This way, they can manage their expenses with the help of the death benefit.
A money back policy is an endowment plan that consolidates investing and insurance into one bundle where the policyholder gets an aggregate sum known as survival benefit at set intervals and the last payout is made towards the end of the plan’s term. Apart from the survivor benefit, the policyholder gets incentives during the course of the policy’s term. If a policyholder dies even as the policy is still active, the beneficiaries are liable to the death benefit as well as any incentives earned throughout the policy’s lifetime.
In the unfortunate event of the policyholder’s death, the family is entitled to a cash payment in the form of a death benefit. Loved ones can choose whether they want the compensation paid in a single lump-sum payment, monthly, or yearly.
For the same payment, money-back insurance provides a smaller coverage to the family as it is primarily for the insured while they are still alive.
Section 80C and Section 10(10D) of the Income Tax Act, 1961 place both money back term insurance plan and without money back plan on an equal footing, making them both eligible for tax-saving advantages.
It does not provide a payout when it matures. This implies that even if the policyholder survives the period, no money is refunded to them or the listed beneficiaries. Until a person has chosen an insurance policy with a refund of premium policy, in which case the interest paid is reimbursed to the policyholder at the end of the life of the policy.
A person who survives the stipulated period of money back life insurance plan receives a proportion of the sum assured as money back payments if they live through the stated duration. Bonuses are also available to the life insured when they are announced from time to time. These bonuses are accumulated during the policy’s entire term and paid out with the final payment under the money return plan.
To sum up, life insurance with or without a money back guarantee is both beneficial insurance policies. You must first determine your financial requirements, compare different financial instruments and then choose the best plan for yourself and your family before making a decision.
- A Consumer Education Initiative series by Kotak Life
Kotak Lifetime Income Plan gives you the assurance of your income continuing throughout your life and in your absence throughout the lifetime of your ...Know more