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Money Back Life Insurance V/S Term Life Insurance

Published On Jun 11, 2021 1:15 PM By InsuranceDekho

An insurance plan is a crucial financial tool that helps you save up your earnings for a prosperous future. All insurance plans have various benefits that they provide under different circumstances. They help keep the financial condition of you as well as your loved ones stable and secure. Therefore, choosing the correct insurance plan that will benefit you and your loved ones is also important. Money back life insurance and term life insurance plans are both popular choices that serve various financial needs.

Money Back Life Insurance V/S Term Life Insurance

Take a look at the two types of insurance plans:

Money Back Life Insurance Plan

Term Life Insurance Plan

A money back plan provides a lesser sum assured but provides payouts at regular instalments that are equal to certain percentages of the sum assured. 

This is an affordable insurance option that provides high sum assured for low premium rates. 

The benefits under this type of plan include maturity benefits, survival benefits, death benefits and rider benefits.

The benefits under term insurance plans  include death benefits and rider benefits. There are no maturity benefits under a traditional term life insurance plan.

Both these types of insurance plans offer tax benefits. Tax benefits are available according to Section 80C of the Income Tax Act of India on the premiums that are payable to the plans. The exemption can be a maximum of 1.5 Lakh INR. This is subject to the regulations of the government.

How to Choose Between Money Back Insurance Plans and Term Life Insurance Plans?

A money back insurance plan is a sustainable option as it provides regular payouts. Thus, you can access your earnings in a graded manner. However, it can seem expensive compared to term life insurance plans which are more affordable. They also provide higher returns but there are no regular payouts nor is there any maturity benefit. It might not be the best option for a long term investment but is good for those individuals who want to make a short commitment or work in risky sectors that increase their chances of death. 


The choice of an term insurance plan is extremely important so that your earnings are made the best use of with the most appropriate returns. Your choice must take into consideration several factors like the duration for which you like to be covered, the kind of returns you will need, your beneficiaries' needs and such other conditions. With these in mind, you can choose between a money back term insurance plan and a term life insurance plan. 

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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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