Endowment Plan vs Money-Back Plan
Close
Close

Buy a Life Insurance Plan in a few clicks

Now you can buy life insurance plan online.

Kotak e-Term Plan

Protect Your family’s financial future with Kotak e-Term Plan. Know more

Kotak Assured Savings Plan

A plan that offer guaranteed returns and financial protection for your family. Know more

Kotak Guaranteed Savings Plan

A plan that offers long term savings and insurance in one premium. Know more

Kotak e-Invest

Insurance and investment in one plan with Kotak e-Invest. Know more

Kotak Health Shield

Insurance against medical expenses related to heart, brain, liver and Cancer. Know more

Difference Between Money Back and Endowment Policy

Difference Between Money Back and Endowment Policy
  • 6th Jul 2022 |
  • 3,071

You must have heard people discussing purchasing an endowment policy or the money-back plan. These are life insurance policies that offer policyholders twin benefits of savings and investments. These policies even qualify for tax deductions. So, do you also get confused between an endowment plan vs a money-back plan? Does it become difficult to decide which one is better for you? Worry not! This article has in-depth detail regarding the money-back vs endowment plan.

What is an Endowment Plan?

An endowment plan is a life insurance plan that is designed in such a way that the policyholder gets the lump-sum amount after the maturity of the policy, or the nominee gets the amount after the policyholder’s demise. It is a preferable plan for those investors who want a long-term strategy. No doubt, the premium charged on this plan is a little high, but you get a handsome amount after the term. The sum invested in an endowment plan will cover all the financial risks that an investor will face in their life and will present you a lump sum amount at the end of the policy term.

What is a Money Back Plan?

A money-back plan is a life insurance plan designed to pay a percentage of the sum assured at regular intervals instead of the lump-sum amount. In addition, the remaining amount will also be delivered along with interest to the insured person when the policy term expires. This plan ensures liquidity and is helpful for short-term investment. For those who want to protect their life along with the investment, a money-back plan is a fantastic one.

Endowment Plan vs Money Back Plan

Although both the endowment plan and money-back plan are life insurance plans that offer similar benefits of saving and investment, both of these plans have some differences as well. Keep scrolling through to know the details:

Term and Maturity Benefits

For the endowment plan, the guaranteed amount and the rewards are made at the end of the maturity period if the policyholder outlives the policy term. There are no provisions for making payments in between the term period. Whereas, in the case of a money-back plan, the insured person will receive the portion of the sum assured at a pre-decided period during the policy period.

Mortality Benefits

Both the plans will give a mortality benefit i.e., the amount guaranteed and appropriate bonuses if the insured person departs during the policy’s tenure. But, in case of the money-back plan, the dependent of the insured person paid the entire sum assured irrespective of the premium instalments paid after the sudden demise of the policyholder. This very attractive feature differentiates the endowment plan vs money back plan.

Suitability

An endowment plan benefits all those who wish to save funds for meeting their long-term economic goals like building a house, buying a vehicle etc. At the same time, a money-back plan is suitable for those who prefer short-term investments to meet sudden expenses like paying EMIs, household expenses, children’s school fees, and many more.

Risk

The risk involved in the case of endowment plans is relatively low as compared to that of a money-back policy. However, the survival and mortality benefits in an endowment plan are higher as compared to money back plan.

Endowment Plan vs Money Back Plan: The Final Conclusion

Now you must have an in-depth idea about what endowment and money back plan is and the differences between the two; you can easily decide which plan is most preferred to meet all your needs. While an endowment policy will pay the investment benefit at the end of the policy term, a money-back policy staggers the investment benefit throughout the policy term at regular intervals.

Therefore, modern-day investors consider an endowment policy slightly better than a money-back policy. However, since the money-back plan offers investment benefits early on, the rate of return on these plans is somewhat lower than endowment policies. Therefore, before buying any plan, it is advisable to check the benefits offered by both methods.

Kotak e-Term Plan

Download Brochure

Features

  • Nominal Cost
  • Multiple Plan Options
  • Flexible Payout Options
  • Critical Illness Rider
  • Tax Savings
  • Long term Coverage

Ref. No. KLI/22-23/E-BB/492

T&C

Browse our library of resources

- A Consumer Education Initiative series by Kotak Life

Similar Articles

How to Choose a Life Insurance Policy

Difference Between Insurance and Assurance?

Can An Individual Buy Multiple Term Insurance Plans?

Process of Filing A Claim For Life Insurance

जीवन बीमा क्या है?

Important Factors to Consider While Choosing the Right Term Period for Your Term Insurance Plan

How to Find the Best Term Insurance Plan in Seven Steps

Life Insurance with Money Back vs Without Money Back

Beware of Phishing & Fraud Insurance Calls

Customer Awareness on Information Security

How To Use Different Types Of Life Insurance For Retirement Planning?

Various Term Insurance Premium Payment Options Available in India

How Much Life Insurance Do You Need?

Is it Possible to Reduce Life Insurance Premium without Affecting Sum Assured?

Why Life Insurance Is Always a Smart Decision

6 Things You May Not Know about Life Insurance

How to Customize Your Life Insurance Policy with Riders

How Often You Must Review Your Life Insurance Policy?

Does Life Insurance Cover Terminal Illness?

6 Different Types of Insurance Policies

Term Life Insurance Vs Money Back Life Insurance

Life Insurance Beneficiary

Important Features of a Term Insurance Plan

Top 5 Common Life Insurance Myths and Facts

Difference Between ULIP and Endowment Plan?

All About Backdating in Life Insurance

Role of Life Insurance in Your Financial Portfolio

Is it Worth Buying Disability Rider on Term Insurance?

Life Insurance and Retirement Planning

What Happens If I Stop Paying My Life Insurance Premium?

5 Advantages of Life Insurance Going Digital

Types of Life Insurance Policies in India

What is Life Insurance?

Best Insurance Plans in India

Digital Life Certificate for Pensioners Seeking Pension

How Much Life Insurance Cover Do I Need?

Who Is A Nominee In A Life Insurance Plan?

Guide for Buying Online Term Insurance Plans for Senior Citizens

Why Term Insurance for Women is Important?

Details Required To Be Filled In A Life Insurance Form

What is Sum Assured in Endowment Policy?

All You Need to Know About Life Insurance - Its Benefits, Features, and Types of Life Insurance

Term Insurance Tips for NRIs in India

Why You Should Never Cancel Life Insurance Policy

Life Insurance Policy Closure

Comparing low premium term insurance Is Not the Only Factor While Buying Life Insurance

How to Choose Life Insurance for All Ages?

Reasons Why Term Insurance Claims Get Rejected

Important Terminologies of Life Insurance

Always keep your Nominee informed

What is Minimum Life Insurance Policy?

Take 100% Responsibility of Your Family with Term Life Insurance

What Is a Whole Life Insurance Plan?

Can You Transfer Life Insurance Policies to Another Company in India?

Is it Possible to Make Changes in a Term Plan’s Specification Post Purchase?

How to Choose the Right Life Insurance Policy for Your Age?

Life Insurance Vs. Mutual Funds Investment

Choose the Nominee of a Term Life Insurance Plan Wisely

Benefits of Term Insurance with Critical Illness Rider

Life Insurance Plans for Women

Can NRI Buy Life Insurance in India?

What Is Financial Planning?

Insurance Changes You Need to Make Post Marriage

Why Buying a Term Insurance is Important for all Parents

Why Your Family Should Know About Your Life Insurance Policy?

5 Things to Consider Before You Buy Life Insurance

“Life” Insurance or “Death” Insurance?

Is Life Insurance For Millennials Really Needed?

Why do I Need Life Insurance?

What is an Endowment Plan?

Why Online Term Insurance Plans Cheap?

What is the Current Trend in Term Insurance?

What Is Insurance Rider and It’s Benefits?

Does Life Insurance Pay for Suicidal Death?

NRI Premium Payment Options

Health Insurance VS Life Insurance

7 Superficial Reasons People Avoid Buying Insurance Online

Term Insurance for Home Loan: How Term Plan Helps in Paying Off Home Loan?

Term Insurance Vs Car Insurance: A Budgetary Choice You'll Regret

भारत में जीवन बीमा पॉलिसियों के प्रकार

5 Smart Steps to keep in mind while buying term policies

Is Life Insurance an Investment?

Staying Insured While Investing

What are the Benefits of Endowment Policy?

Savings cum Protection Plans Secures Your Family from Unforeseen Events

A Term Insurance Guide for Disabled People

How Many Insurances Should I Have?

How to Calculate Human Life Value(HLV)?

Biggest Life Insurance Myths

Kotak Life Claim Settlement Ratio

Life Insurance vs Mutual Funds

5 Reasons Why a Women Should Buy a Life Insurance

How to Revive the Lapsed Life Insurance Policy?

How to Buy a Term Life Insurance Online

Sabse Pehle Life Insurance

Different Kind of Deaths that are Not Covered in a Term Insurance Plan

Is Voluntary Life Insurance the Same as Basic Life Insurance?

Loan Against Life Insurance Policy

Unit-Linked Life Insurance (ULIPs) vs. Term Insurance

5 Easy Steps to Buying A Policy

What is Underinsurance & The Dangers of Being Underinsured

All About Life Insurance and How It Works?

Do Your Financial Planning with Life Insurance!

क्या जीवन बीमा एक निवेश है?

How to Make Death Claims on Life Insurance?

Why Renewal of Term Insurance Plan is Important

What is a Single Premium Term Plan and its Tax Benefit?

Everything You Must Know About ULIP Riders

Life Insurance and Millennials

Can You Apply For A Life Insurance After Getting Heart Attack? Here is Everything You Need To Know

Life Insurance for Overweight Applicants

Benefits of Buying Term Insurance Plan for Senior Citizens in India

What Is the Procedure to choose a nomination in life insurance policy?

Adding A Child to Your Life Insurance Policy?

A Step-by-Step Guide: How To Make An Investment Plan?

Most Common Life Insurance Riders to Enhance Your Existing Policy

Important Life Insurance Terms You Must Know

Nominee in insurance - A Complete Guide on nomination in insurance

Why is Medical Test Important While Buying a Term Insurance?

Different Types of Insurance Policies in India

How Does Life Insurance Work?

What Should One Expect During the Medical Evaluation for Life Insurance?

Different Types Of Life Insurance In India

ULIPs: Suitable for all

Choosing Between Short-Term & Long-Term Insurance Plans

Why Do Life Insurance Agents Avoid Selling Term Plans?

Does Life Insurance Policy Cover Covid Death?

How Much Life Insurance Costs and How Much Insurance Cover You Need?

What is Human Life value and a Human Life Value Calculator?

5 Things to Keep in Mind While Buying Life Insurance Policy

How Do Term Insurance Plans Differ for Smokers?

Why do most Indians choose the wrong way to buy life insurance?

9 Most Important Things You Must Learn About Paying Life Insurance Premium

Term Life Insurance vs Accidental Death Insurance

First Job? Here’s Some Tips on How to Manage Finances

Term Insurance Vs Life insurance: Small Details, Big Differences

Life Insurance for Overweight Applicants

What Is Staggered Payment Option Under Term Insurance Policy?

Does Family History Affects your Term Life Insurance Rates?

What Is The Life Insurance Penetration In India And How Does It Compare Globally?

5 Common Life Insurance FAQs and Answers

5 Reasons Why You Need Life Insurance in College

Are Deaths Due To Coronavirus Covered by Kotak E-Term Plan?

Health Insurance VS Life Insurance

Importance of Checking Claim Settlement Ratio before Buying Life Insurance

FAQs on Life Insurance

Types of Life Insurance Or One Investment, Many Options

What Is Social Impact Investing and How Does It Benefit Society?

In India, should NRIs purchase life insurance?

Key Things to Review in Your Life Insurance Policy Document

Insurance Vs Investment - A Guide to Your Financial Goals

What Is Investment Insurance?

All about IRDAI

How to Select a Perfect Life Insurance Policy in India to Protect Your Future?

Think About Life Insurance Sooner than Later

What is Group Insurance?

Why You Should Buy Term Insurance under the MWP Act (Married Women’s Property Act)?

Types of Insurance You Must Invest in for Secure Future

When Should You Review Term Life Insurance of Yours?

1 CR Term Insurance Plan: How to Pick the Best 1 CR Term Plan

जीवन बीमा पर ऋण

5 Ways to ensure faster settlement of claims

Can a Term Plan be the Substitute for a Retirement Plan?

Voluntary Life Insurance Policy Vs Group Life Insurance

What is a savings plan?

What are robo-advisors in insurance?

Is It Time to Review Life Insurance Policy of Yours?

How To Choose The Right Life Insurance

Is It Advisable To Have Multiple Life Insurance Policies?

Why One Must Buy Term Insurance before 25 Years

Choosing a Life Insurance Beneficiary

How to Buy a Life Insurance Plan?

Guidelines for Linking Aadhar and PAN to Insurance Policies

Terms and Conditions of Term Insurance Plans

Life Insurance for Millennials

What is Insurance Coverage? Overview, Types, and Examples

Difference Between Term Insurance and Endowment Plan

All about Your Rights and Duties While Buying Life Insurance Policy

Do Life Insurance Premiums Increase Every Year?

All about Life Insurance Calculators

Term Plan with Return of Premium (TROP)

5 Benefits of Gifting Life Insurance Cover to Your Spouse

Compare Different Life Insurance Products Offered By Kotak Life

What Is Surrender Value (Cash Surrender Value) in Insurance and how is it calculated?

What Should One Consider Buying: Term Insurance or Traditional Life Insurance

Term Insurance Claim Process

When are Millennials required to take out a life insurance policy?

10 Most Frequently Asked Questions - FAQs on Term Insurance

Role of IRDAI in the Insurance Sector

What is the Difference Between Limited and Regular Pay Insurance Plan?