I am a 30-year-old man working with a leading hospitality chain. I plan to invest in a life insurance plan but the present unstable state of the economy has me worried about what will happen to my invested money. Should I invest in an endowment plan as it will give me guaranteed returns?

Endowment plans are essentially money accumulation plans that guarantee a certain amount of cash at the end of a specified period or when the eventuality happens, whichever is earlier.

An endowment plan lays emphasis on returns rather than on family protection as the protection element offered under endowment plans is temporary.

Endowment plans can be used to save for a specific purpose such as marriage or a child’s education, with an added benefit of protection to your family, in case of untimely demise during the policy tenure.

I am 25 years old and want to invest in a life insurance plan. How do I decide the duration of policy I should go for?

The duration of the life insurance policy depends on a number of factors, such as the age of the individual, age of the dependants, income, and many others. Therefore, the term of the policy has to be determined on a case-to-case basis.

Ideally, the term of your policy may be equal to the number of years your family is likely to remain financially dependent on you.

Practically, however, one has to also see how long one can support a policy in terms of payment of premium. It is advisable to strike a balance between the premium payment term and the period of risk cover.

Readers are welcome to write in with their queries to askmint@livemint.com. The questions will be answered by senior executives from leading insurance firms.

This week’s expert is Rajesh Relan, managing director, MetLife.