When choosing a life insurance policy or an investment plan, you consider a few factors. For instance, you start by considering the basic features of the policy – what is the premium going to be? What returns will you get and when? After that, you start evaluating the risk factor of the policy or the scheme. When a policy ticks most of the boxes mentioned above, you finally go ahead and start the application process.
Similarly, if you have been comparing money back policies and life savings and investment plans lately, then let’s make the job easy for you. Here is a detailed comparison for you.
The maturity benefits
When you invest in a life savings plan, you get the guaranteed amount and suitable rewards during maturity when the policy term is over. However, if you get a money back policy, then you will get a part of the sum assured at pre-decided intervals all through the term. Also, you will get the rest of the sum assured on maturity when the policy term ends. This will help you decide when to invest in Kotak Guaranteed Savings Plan as per your financial needs.
The suitability factor
The choice between a life savings plan and a money back policy basically depends on your short-term or long-term goals. You can invest in Kotak Guaranteed Savings Plan if you want to fulfil your long-term goals. Maybe you want to fund your kid’s higher education, buy a house, or save up for retirement.
On the other hand, the money back policy is meant for people who want to fulfil their short-term goals. So, this is the one you choose when you want a steady income facility to meet household expenditures, pay monthly school fees or EMIs, etc.
The mortality benefits
Both these plans offer a guaranteed amount and related bonuses in case of the insured individual’s demise during the tenure. But when you take a money back policy, in case of your untimely demise, your dependents will get the sum assured completely, regardless of the number of premium instalments you made.
Also, this is a factor that tends to make money back policies more expensive than life savings plans. However, the charges differ from one bank or financial institution to another. So, the difference in charges between life savings and money back policies might not be that great in some banks or institutions.
The risk factor
Money back policies have a greater risk factor compared to the life savings and investment plan. Moreover, you typically need to pay a lower premium for the life savings plan than a money back policy. Of course, the premiums depend on a host of factors. Therefore, outlining an exact amount is impossible.
Hopefully, you have found all the information you need to run a comparison. Now, assess the advantage of each policy as per your financial needs and choose one that suits you the best.
Click here to know more about Kotak Guaranteed Savings Plan: https://www.kotaklife.com/online-plans/savings-plan
