Term insurance and traditional life insurance (endowment or money-back plans) both pay out on death, which is why they get compared constantly. But they're built for different jobs, and treating them as substitutes is where most families go wrong.
Term insurance is pure protection: a large cover for a relatively small premium, with no maturity payout if you outlive the policy. Its entire purpose is to replace your income for your dependents if you're not around, nothing more.
Traditional life insurance bundles a smaller amount of cover with a savings or investment component, and pays out something even if you survive the term. That bundling is also its weakness: the insurance portion is thin, and the investment portion typically grows slower than a mutual fund would over the same period.
A common mistake is buying a ₹5–10 lakh endowment plan and treating it as "life insurance sorted", when a family's actual income-replacement need is often ₹50 lakh to ₹1 crore or more. The gap between what's bought and what's needed is the real risk.
A cleaner approach for most families: buy adequate term cover separately, sized to actual income replacement needs, and keep investing separately through instruments built for growth. Two clear tools, each doing one job well.