Endowment Plans and
Money-Back Plans
A plan that provides life coverage and also acts as savings are always liked by the policy buyers. But selecting from a number of insurance plans is a hectic task. The endowment plan and money back plan to contribute to such plans.
Nevertheless, there are several similarities as well as differences between the two. One can opt for any of the plans depending upon their preferences. Here are a few of the comparisons made between the two plans.
An endowment plan is a life insurance policy designed to pay a lump-sum amount after a fixed time period on maturity or in case of death.
The Endowment Plan is for those investors who want to have long term plans. People who are planning for future events like a retirement plan or the marriage of their
children can opt for the endowment plan. This plan has higher premiums but it also pays you a handsome assured amount at the completion of the policy term. This secures both, the savings and provides insurance to the policyholder.
Money-Back Plan is a life insurance policy designed to pay a percentage of sum assured at regular intervals instead of the lump-sum amount in case of maturity or death. It is an endowment plan with the benefit of liquidity.
Whereas all those who want to protect their lives along with investment in such a way that they get an amount regularly at intervals should opt for Money-Back Plan. This plan is helpful in short term investment like an admission of your child in college for a particular course. The amount of money paid at intervals brings motivation to the policyholder for planning small family activities and boosts him up in progressing in life with the help of regular income. So, those individuals having such plans can opt for Money-Back Plan.
Compare and buy the most suitable Life Insurance Plan from the below-mentioned IRDAI-approved Life Insurance companies.
An endowment plan and money-back plan both are the types of life insurance plans. Both plans provide maturity and death benefits. The policyholder can use this plan both as an investment plan and an insurance plan.
Moreover, the sum assured is paid both in case of death and survival in the endowment plan. Because of the additional features provided by both, the premiums are higher than normal plans. Both the plans are not dependant on market like ULIPs. The risk in both the plans is a bit low because the amount the policyholder invests is on a fixed rate which is agreed beforehand at the time of buying the policy.
The difference between the endowment plan and money back plan is that in the endowment plan one gets the sum assured and the bonus at the completion of the maturity period. Whereas in a money-back plan the policyholder gets a percentage of sum assured at regular intervals. The death benefit is in the form of the sum assured and applicable bonuses in case the policyholder dies within the policy term.
The table mentioned below highlights a few of the differences between an endowment and money-back plan:
| Criteria | Endowment | Money-Back |
| Definition | It is an investment and insurance policy. | It is an investment and insurance policy participatory in nature. |
| Benefits | Sum insured and bonuses if any, paid after the completion of the policy | A percentage of sum assured is paid at regular interval |
| Tenure | 10 years to 35 years | 5 years to 25 years |
| Loan Facility | It can be used as security to obtain a loan. | It is not subjected to any kind of mortgage as a portion of the sum assured is constantly deducted. |
The above-mentioned facts must be helpful to you in opting between an endowment plan and a money-back plan. So, you are free to choose one of the life insurance plans depending upon your preferences.
See More Life Insurance Articles
See More Life Insurance Articles
May 1, 2023
I seek help from PolicyX when it comes to purchasing any kind of insurance because they provide me with the best quotes and options for insurance
December 14, 2022
PolicyX has a smooth service from booking policy to verification. Employees are very patient and have good knowledge and help you throughout the process. Had great experience dealing with them
December 9, 2022
I had many confusions regarding the term policies . But Policyx has handled it well, m happy that they are my wayfarer in this journey.
July 11, 2022
Good company. Presents nice term insurance plans and flexible plans also. My husband has brought one for the family.
July 11, 2022
IndiaFirst Term Insurance company ensures that your family s needs are looked after. One of the best companies offers a term plan per your needs.
July 6, 2022
I recently received the claim amount of the policy that my husband had brought for us. I am glad that the company understands the needs of its customers and their families. Well done Canara HSB...
July 6, 2022
I bought a term plan with Canara HSBC for the protection of my family and have been satisfied with the benefits received. It is simple and easy to buy their plans.
July 6, 2022
I am very happy with the term plans offered by the Canara HSBC Life Insurance company. The plans offer comprehensive coverage and I am sure will support my family after my demise.
Naval Goel is the CEO & founder of PolicyX.com. Naval has an expertise in the insurance sector and has professional experience of more than a decade in the Industry and has worked in companies like AIG, New York doing valuation of insurance subsidiaries. He is also an Associate Member of the Indian Institute of Insurance, Pune. He has been authorized by IRDAI to act as a Principal Officer of PolicyX.com Insurance Web Aggregator.
