What is the difference between an endowment plan and a money-back plan? What are the benefits of opting for a money-back plan?

A money-back plan not only covers your life, it also assures a certain per cent of the sum assured as cash inflow at regular intervals. Under a normal endowment plan, it is on the maturity of the plan that the policyholder gets the sum insured plus the accumulated bonus, if any.

Traditional money-back plan can help plan effectively for critical milestones of your life since they can be tailored to give periodic payments at specific periods (intervals as stated in the policy document) according to the needs of the policyholder. The risk cover continues for the entire term of the plan in spite of the instalments already paid. If you outlive the plan, the balance sum assured is paid back to you.

I am a 26-year-old man working in a private company. If I have group life insurance through my job, do I still need an individual life insurance plan?

Group life insurance is a benefit some people receive through their employers. But no matter how good the benefit package is, it comes with the job with the employer currently paying the premiums to cover your basic protection needs. As you are at a young age, you might opt for other alternative career opportunities. In such instances, the insurance cover your current employer offers may cease the moment you leave that job. With an individual life insurance plan, the life insurance cover stays with you no matter where you work. So, it is always advisable that your own personal plan should be the mainstay of your coverage, with the company’s offerings supplementing as incremental source of protection. A sound balance between these two may be the right choice for you.

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.