How Each Plan Works
🛡️ Endowment Plan (714)
Pay premiums → wait for full term → get everything at maturity as one lump sum.
Year 1-20: Pay Premium 💳
Year 20: Get SA + Bonus + FAB 💰
💰 Money Back Plan (720)
Pay premiums → get periodic payouts during the term → remaining at maturity.
Year 5: Get 20% SA 💵
Year 10: Get 20% SA 💵
Year 15: Get 20% SA 💵
Year 20: Get 40% SA + Bonus + FAB 💰
Side-by-Side Comparison Table
| Feature | 🛡️ Endowment (714) | 💰 Money Back 20 (720) | 💰 Money Back 25 (721) |
|---|
| Plan Type | Endowment | Money Back | Money Back |
| Entry Age | 8-55 ✓ | 13-45 | 13-40 |
| Policy Term | 12-35 yrs ✓ | 20 yrs (fixed) | 25 yrs (fixed) |
| Survival Benefits | ❌ None | ✅ 20% at Yr 5, 10, 15 | ✅ 15% at Yr 5, 10, 15, 20 |
| Maturity Payout | 100% SA + Bonus ✓ | 40% SA + Bonus | 40% SA + Bonus |
| Bonus Rate | ~₹48/1000/yr | ~₹52/1000/yr ✓ | ~₹50/1000/yr |
| Death Benefit | Higher of 10×AP or 1.25×SA + Bonus | Full SA + Bonus (even after SB paid) ✓ | Full SA + Bonus (even after SB paid) ✓ |
| Premium Level | Lower ✓ | Higher | Medium |
| Liquidity During Term | ❌ No cash flow | ✅ Every 5 years ✓ | ✅ Every 5 years ✓ |
Payout Timeline — ₹10L SA, 20-Year Term
Here's when you receive money in each plan:
| Year | 🛡️ Endowment (714) | 💰 Money Back 20 (720) |
|---|
| Year 5 | ₹0 | ₹2,00,000 (20% SA) |
| Year 10 | ₹0 | ₹2,00,000 (20% SA) |
| Year 15 | ₹0 | ₹2,00,000 (20% SA) |
| Year 20 (Maturity) | ~₹19,60,000 | ~₹14,40,000 |
| TOTAL RECEIVED | ~₹19,60,000 | ~₹20,40,000 |
*Approximate estimates for ₹10L SA, Age 25, 20yr term. Endowment maturity = SA + 20yr bonus + FAB. Money Back total = 3 survival payouts + maturity (40% SA + full bonus + FAB).
⚡ Important note: While the Money Back total received appears similar, the time value of money makes Endowment slightly better overall — because in Money Back, you receive ₹6L over 15 years but that money isn't growing with LIC. If you reinvest those survival benefits, Money Back can match Endowment returns.
Total Returns Comparison — ₹10L SA, Age 25
| Detail | 🛡️ Endowment (714) | 💰 Money Back 20 (720) |
|---|
| Term | 20 years | 20 years |
| Annual Premium (approx.) | ~₹53,000 ✓ | ~₹58,000 |
| Total Premiums Paid | ~₹10,60,000 ✓ | ~₹11,60,000 |
| Survival Benefits Received | ₹0 | ₹6,00,000 ✓ |
| Maturity Payout | ~₹19,60,000 ✓ | ~₹14,40,000 |
| Total Money Received | ~₹19,60,000 | ~₹20,40,000 |
| Net Profit | ~₹9,00,000 | ~₹8,80,000 |
*All amounts are approximate estimates. Money Back total includes all 3 survival benefits + maturity payout.
Death Benefit — Key Difference
This is one of the biggest advantages of Money Back plans:
🛡️ Endowment — Death Benefit
Higher of (10 × Annual Premium) or (1.25 × SA) + Accrued Bonus. Standard life cover.
💰 Money Back — Death Benefit ⭐
Full SA + Accrued Bonus — even if survival benefits were already paid. Example: If you received ₹6L in survival benefits and die in Year 18, nominee still gets full ₹10L SA + Bonus. No deduction.
Who Should Buy Which?
🛡️ Choose Endowment if:
- You want maximum maturity amount
- You don't need cash during the term
- You want a lower annual premium
- You want flexible term options (12-35 yrs)
- You're saving for a single big goal (retirement, child's education)
💰 Choose Money Back if:
- You need regular cash flow every 5 years
- You want superior death benefit (full SA even after payouts)
- You want to fund periodic expenses (child's school fees, holidays)
- You prefer lower risk — getting money back periodically
- You want forced savings with withdrawals
💡 Expert Tip (Haresh Hirapara): In my experience, Money Back plans work best for middle-income families who need periodic liquidity — the survival benefits at Year 5, 10, 15 align perfectly with children's milestones (school admissions, college fees). For salaried professionals with steady income who can invest separately, the Endowment plan gives better long-term returns. Consider your cash flow needs first, then decide. Consult a financial advisor for personalized guidance.
🧮 Compare Premium for Both Plans →
Frequently Asked Questions
What is the difference between Money Back and Endowment plan?+
Payout structure: Money Back gives periodic survival benefits (20% of SA every 5 years) plus remaining at maturity. Endowment gives the entire amount as a lump sum at maturity. Endowment generally provides higher total returns because the full SA earns bonus throughout. These are approximate figures based on publicly available data.
Which gives better returns — Money Back or Endowment?+
Endowment gives slightly better absolute returns (~₹19.6L vs ~₹20.4L total for Money Back including survival benefits) and requires lower total premium outgo (~₹10.6L vs ~₹11.6L). However, Money Back provides regular cash flow during the term. If you reinvest the survival benefits wisely, returns can be comparable. These are approximate estimates.
What are survival benefits in Money Back plan?+
Survival benefits are periodic cash payouts during the policy term. In Plan 720 (20-Year Money Back), you get 20% of SA at Year 5, 10, and 15. In Plan 721 (25-Year), you get 15% at Year 5, 10, 15, and 20. These are automatic — paid if the policyholder is alive and premiums are up to date.
Is the death benefit different in Money Back vs Endowment?+
Yes! Money Back has a unique advantage — the death benefit is the full SA + bonus regardless of survival benefits already paid. Even if you received 60% of SA through survival benefits, the nominee still gets the full SA on death. In Endowment, the death benefit is the higher of 10×AP or 1.25×SA plus bonus.
Can I get both Money Back and Endowment plans?+
Yes! You can buy multiple LIC policies. A common strategy is combining an Endowment/Jeevan Anand for long-term wealth building with a Money Back for periodic cash flow. Consult a financial advisor to determine the right SA split based on your income and goals.
⚠️ Disclaimer
This article is for educational and informational purposes only. LIC-Calculator.com is not affiliated with LIC of India. Premium, maturity, and survival benefit figures are approximate estimates. Actual amounts may vary. For official rates, visit licindia.in.
This is not financial advice. Please consult a certified financial advisor before making insurance decisions.