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Comparison Of Money Back With Endowment Plans

Published On Dec 26, 2021 10:00 AM By InsuranceDekho

People in India often want to invest in traditional insurance and savings programs to help them save for short- and long-term financial goals. Traditional plans such as endowment and Money Back are typically people's first choices, however owing to a lot of ambiguity around their returns and policy advantages, consumers are sometimes perplexed as to which investment option is the best. This article will assist you in presenting a clear picture of endowment and Money Back arrangements. The investment and insurance components of money back and endowment programs are mixed. The most significant distinction between the two is the time period for receiving the cash insured.

Endowment vs. Money Back Plan: What's the Difference?

While both endowment plans and Money Back policies serve the same goal as a whole life insurance policy, there are key differences between the two. As a result, here are some key differences between endowment and Money Back plans to help you make an informed selection.

1. Long-term and maturity advantages

The amount guaranteed and appropriate incentives are given to the insured individual at the time of maturity if they outlast the insurance term under an endowment plan. During the endowment plan, there are no provisions for making payments. A Money Back policy, on the other hand, pays out a portion of the sum assured at predetermined intervals during the policy term. Furthermore, if the policyholder outlives the policy term, the insured person will get the remaining sum assured at maturity.

2. Benefits of Mortality

If the insured individual leaves within the policy's term, the endowment policy, and the Money Back plan will pay the promised amount plus applicable incentives. In a Money Back plan, however, in the event of the policyholder's death, the whole sum promised is paid to the insured person's dependents, regardless of the premium instalments paid. This is the element that distinguishes an endowment from a Money Back plan, and it is also the reason that a Money Back plan is slightly more expensive.

3. Suitability

Individuals who want to save money for all of their long-term financial goals, such as buying a house, paying for their children's higher education, or retiring, may consider an endowment plan. Money Back insurance, on the other hand, is ideal for those who want a consistent income stream to meet all of their short-term financial goals, such as paying EMIs, home bills, children's school fees, and so on.

4. Risk

When compared to Money Back insurance, the risk associated with endowment programs is rather modest. In addition, the survival and mortality benefits of an endowment plan are greater, and at a smaller premium payment.


A Money Back policy pays out at regular periods during the policy term, allowing you to achieve your short-term objectives. An endowment plan, on the other hand, allows you to save a substantial sum of money that you may enjoy when the policy matures. Before choosing an endowment or Money Back plan, it's a good idea to think about your financial goals and then choose a plan that fits them. Before deciding on a plan, compare the policy's advantages and riders. Finally, both approaches are fine; it all relies on what your investment aim is and how successful your investment will be.

Also read - General Terms And Conditions Of A Money Back Policy

How Can A Money Back Plan Help You Save Money?

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.

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