Wednesday, September 12, 2018

Endowment or Money Back – Which of These Plans Will Protect Your Interests?

money returns
There are times when you may feel confused about the types of investment plans you should buy. This article is intended to clarify your doubts while attempting to compare and pick money back and endowment plans. It takes a lot of researching for you to determine which insurance plan matches your long-term investment goals.

Initially, you may feel confused due to the presence of so many investment products launched by insurance providers at a time. Intermediaries can make certain features seem more confusing while offering a savings plan there by causing more of miss-selling.

Need to Choose the Right Insurance Plan

Most investors tend to choose orthodox plans for acquiring good returns on savings from time to time. This, in turn, will help them achieve savings that can meet both their long-term and short-term financial goals. Money back and endowment plans are among all traditional plans that have grown popular of late. You might get confused about choosing the right investment option when you have certain shaded areas on your policy benefits and returns. An endowment ora money back policy has a certain blend of insurance and investment component. The period of time that lapses between the releases of sum assured proves to be the basic difference of these plans.

Benefits Receipt Term

Money Back Plans:

A certain percentage of the sum assured is paid to the policyholder periodically and the remaining bonuses and sum assured are met on the maturity of the policy term.

Endowment Plans:

Once the policy term is survived by the policyholder then upon maturity all applicable bonuses and agreed sum assured are paid to him.

Buying Criteria

You may accumulate considerable savings by investing in endowment plans if your primary objective is to look for long-term savings goals. It will help you create a fund for managing your retirement years, child’s marriage and other financial obligations. A money back plan is ideal for you when your regular income suffices your short-term requirements only.

Death Benefits

In the event of a policyholder’s death during the terms of his endowment and money back policy, both policies will pay him his applicable bonuses and sum assured. Money back plans will yield income regularly after a specified period. You’ll need to go through the policy paper very carefully while signing up.

At the end of the initial 5 years, you’ll be entitled to receive a survival benefit worth 20% based on your basic sum assured. Likewise, at the end of the 10th policy year and the 15th policy year, you’ll receive survival benefits worth 20%. But at the end of the 20th policy year, you’ll receive 60% of survival benefits alongside the vested bonus. So, that yields a benefit worth 120% for you in total.

Final Words:

You’ll need to be sure of your investment goals prior to choosing your money back or endowment plans and then pick them accordingly. While narrowing down on your chosen plans, you must check out the riders and policy benefits very carefully. In the end, both plans chosen by you are good; in order to achieve a fruitful investment, you must base your decisions on the nature of your investment goals.

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