About to buy a ‘guaranteed returns’ life insurance plan to save tax? Read this

Hard sell

During the tax-saving season, insurance agents push life insurance policies with guaranteed returns and tax benefits.

Beware of such marketing tactics!

These plans might seem appealing, but they're just endowment policies in disguise.

Worst of both worlds

Though endowment plans combine insurance and investment, they offer inadequate coverage and lower returns.

Return of endowment plans (guaranteed income plans)

Our advice

Keep insurance and investment separate. Don't be lured by the promises of dual benefits.

What you should do

1) Opt for a term plan. They are an affordable kind of a life insurance policy. 2) To save tax, opt for tax-saving mutual funds.

Thanks for Reading!