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What Are The Major Differences Between An Endowment And Money Back Policy?

A money back plan differs from an endowment plan in that an individual receives a set sum assured percentage at regular periods in a money back plan. When it comes to endowment policies, a person receives the sum assured as well as a bonus at the end of the policy period. The nominee receives a death benefit in the form of sum assured and bonus applicable if the policyholder dies unexpectedly during the policy period. A policy buyer is always on the lookout for a plan that includes both life insurance and a savings account. However, selecting the best insurance plan among the numerous options available is a challenging undertaking. A Money Back plan and an endowment plan are examples of such arrangements. Let's look at both of these designs in detail, as well as the contrasts between them.

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 decision.

  • Benefits of Time and Maturity

The amount guaranteed and appropriate rewards are given to the insured person at the time of maturity if they outlive the insurance term in 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 throughout the policy term. Furthermore, if the policyholder outlives the policy term, the insured person will get the remaining sum assured at maturity.

  • 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 appropriate bonuses. In a Money Back plan, however, in the event of the policyholder's death, the entire sum assured is paid to the insured person's dependents, regardless of the premium installments 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.

  • 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 people who require 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.

  • Risk

When compared to a Money Back policy, 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 installment.


After going over all of the advantages and downsides of money back vs. endowment plans, you should be able to see that both endowment plans and Money Back policies have their own set of benefits and drawbacks. However, some modern investors believe that an endowment policy is marginally superior to a Money Back program.We hope that the above information will assist you in deciding between a money back plan and an endowment plan. As a result, you have the freedom to choose a life insurance plan that meets your specific needs and budget.

Also read: Exclusion Of A Money Back Policy

How To Easily Purchase A Money Back Plan Online?

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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