4. Money Back Policy

Money back plans are like endowment plans but have one difference, the payment is staggered through the policy term. It offers some part of the sum assured at periodic intervals through the policy term. Incase the policy holder dies during the term of the plan; policy nominee will receive the sum assured irrespective of the payouts already made.

Bonuses (accrued till the date of policy holder’s death) are also calculated on the full sum assured and not the balance money left. Since money-back plans provide larger benefits than an endowment plans, its premiums are also expensive.

5. Pension Plans

Pension plans are investment option which helps you to set up an income stream in your post retirement years. For this you will need to give away your savings to an insurance company, which will charge you a nominal fee and invest your savings on your behalf. The returns you which you receive shall depends on a number of factors like what was the amount you contributed and when you bought the plan, the number of years when you want the money to come to you and at what age that starts.

A pension plan contract will offer you two options, either to receive the payment (called annuity) immediately after you enter the contract which is known as the immediate annuity contract, or after some years of deferment, known as deferred annuity.

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