Apart from the periodic cash backs, this policy also ensures a guaranteed payout to the policyholder on maturity. The guaranteed benefit ranges from 20% to 40% of the sum assured depending on the policy term chosen by the investor.

The scheme also provides for an increasing death benefit to the nominee of the policyholder. The sum assured thus increases by 7% every year without impacting the premium amount determined at the time of buying the policy.

Prima facie, the features of Kotak Money Back Plan appear reasonably attractive. The guaranteed additions on maturity and the in-built provision of increasing death benefit can easily lure investors. What, however, dilutes these features is the high cost of premiums charged by the scheme.

In fact, if one were to ignore the bonuses, which as such are payable only at company's discretion and are not guaranteed, an investor eventually ends up paying more as premiums than the total benefits that accrue from this scheme. There are thus hardly any investment gains generated by this scheme.

As far as the periodic cash backs are concerned, investors can probably earn better returns by periodically investing in bank fixed deposits for a five-year time period. To ensure an appropriate life cover for the dependents, invest in a suitable term-plan instead.