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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.
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.
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!
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As an investor, we want our insurance plans to perform the main responsibility of providing for our family in our absence. Additionally, we are also looking for plans that give us returns after a certain point in time. If we get a return on our investment, our joy knows no bounds. This is human nature and it has led to a confusion between a term insurance policy and a moneyback insurance plan. It is important to know the difference between the two.
What is Term life insurance?
A term insurance plan is a life insurance plan that provides financial security to your family in case if an unfortunate event takes place during the policy tenure. You can get the plan at a nominal premium amount and the sum assured will be paid to the family. The plan is designed to cover the risk of death. If you outlive the policy duration, you do not receive any maturity benefits.
A moneyback life insurance is an endowment plan, which will provide you with a life cover for a specific term. This plan will give you returns at regular intervals during the policy term. These returns are known as survival benefit. In case something unfortunate happens to you before the maturity, your nominee will receive the sum assured irrespective of the survival benefits that were provided to you earlier.
You need to understand the difference between the two types of insurance plans to make a well-informed decision.
The term plan is a life cover, which provides you a high coverage at a low premium amount. Conversely, a moneyback insurance policy has a lower sum assured for the same premium amount. In case of death of the insured, a term plan will pay the lump sum to provide for the financial security of the family members while the moneyback plan will pay the sum assured and the accrued bonus.
2. Return on investment
2. Return on investment
In a term plan, the insurance company will not provide any survival benefits if you survive the policy term. However, the moneyback plan will return a certain percentage of the sum assured at specific time intervals within the policy term.
3. Tax benefit
Both the insurance plans offer tax benefits. The premium amounts paid for term life insurance and moneyback plans are exempted from taxation under Section 80C of the Income Tax Act, 1961. The maximum exemption amount is INR 1.5 lakh. There is no tax payable on maturity benefit, death benefit, or survival benefit.
You need to consider your personal goals and financial requirements when choosing between the two. A term insurance plan is a protection plan and there is noinvestment component. It will financially secure your loved ones if something untoward happens to you. However, if you are looking for returns from the plan, you need to opt for a moneyback life insurance policy. It also works as an investment plan in addition to offering an insurance cover. Those who have already met protection needs and have excess cash can opt for moneyback plans to meet their long-term financial goals. Keep the purpose of investment in mind when making a decision.
- A Consumer Education Initiative series by Kotak Life
Kotak e-Term Plan is a pure term insurance plan that provides a holistic life protection at affordable prices. Find out the eligibility criteria, key ...Know more
Kotak Premier Moneyback Plan is a limited pay plan that provides lump sum payouts at regular intervals to meet your interim financial requirements and...Know more