Endowment plans are a type of life insurance plans which blend the benefits of a life insurance and an investment tool. Endowment plans can act as an investment tool providing a lump sum amount at the end of the policy term known as maturity benefit. As endowment plans are a type of life insurance plan, these plans provide financial support to the family of the life assured in case of unforeseen demise of the life assured. Usually endowment plans are participating plans which allow wealth appreciation, that is these plans participate in the profits of the insurance provider according to their performance in the market. Hence, additional bonuses (if any) are declared upon the endowment policy at the end of each policy year.
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What is an Endowment Plan?
Types of Endowment Plans
Below mentioned are the different types of endowment plans:
- Unit Linked Endowment Plans: Unit-linked endowment plans are fixed term savings plans which provide life cover. Under this plan, the premium paid towards the plan is invested into different market linked investment options chosen by the life assured. This type of endowment plan is ideal for people who have a high-risk appetite. The return of investment under such plans depends on the performance of investment options in the market.
- Full Profit Endowment Plans: Under full profit endowment plans the basic sum assured is provided to the life assured. However the final payout is higher depending upon the bonuses declared upon the endowment policy at the end of each year. The bonus is provided at the time of plan maturity or at the end of policy term.
- Low-Cost Endowment Plans: Low-cost endowment plans help the life assured to accumulate funds which can be paid after a certain time period, usually for the repayment of mortgage.
- Non-profit Endowment Plans: Under non-profit endowment plans a maturity benefit is provided to the life assured in case he/she survives the entire policy tenure. In case the life assured passes away anytime during the policy tenure a death benefit is provided to the nominee.
Benefits of Endowment Plans
Following are benefits that come along with a endowment e policy -
- Maturity Benefits: Under endowment plans the life assured receives a maturity benefit in case he/she survives the entire policy term. Along with the maturity benefit bonus is also provided at the time of the maturity, if there are any bonuses declared upon the endowment policy.
- Wealth Appreciation: Endowment plans are participating insurance plans that allow wealth appreciation. Bonuses are declared upon the endowment policy every year which are the additional profit distributed to the life assured. The insurance company can choose to declare reversionary or terminal bonuses on the policy. The bonuses are provided with the maturity benefit at the end of the policy term.
- Additional Coverage: The life assured can choose to add riders to the endowment policy which are additional coverages that can be purchased with the endowment policy at an additional cost. Common riders that can be chosen for an endowment plan are Accidental Death Benefit, Critical Illness Benefit, Waiver of Premium etc. The rider enhances the power of the base cover of your endowment policy.
- Tax Benefits: Under endowment policy the life assured can avail tax exemptions as premium paid for an endowment policy qualify for tax exemption under Section 80C and 10(10D) of the Income Tax Act, 1961. Maturity benefits payable under an endowment plan are also eligible for tax exemptions.
Why Choose InsuranceDekho?
Here are some good reasons why you should choose InsuranceDekho while purchasing an endowment plan: .
- Easy Policy Issuance: At InsuranceDekho you can easily purchase an endowment policy easily by following these simple steps:
- Provide your personal details such as Name, Age, Mobile Number and Date of Birth
- Compare available endowment plans at once
- Select a plan that fits your needs
- Pay the premium and submit the required documents.
- Committed Customer Service: Our customer support team is available all 7 days of the week to provide you with effective solutions for your queries. Our aim is to be always readily available to provide you with best solutions regarding your queries.
- Availability of Best Plans: We have partnered with some of the top-notch insurance providers in India that offer you endowment plans. We strive to provide you with the best insurance plans offered by best insurance providers in India.
- Smooth Claim Settlement: At InsuranceDekho we aim to provide a quick and claim settlement, to ensure that our customers are financially satisfied in difficult times.
How To Buy Endowment Plans With InsuranceDekho?
Purchasing an endowment plan at InsuranceDekho is easy and a quick process. You can compare and purchase an endowment by following these simple steps: .
- Provide Details: To compare different quotes enter your details such as mobile number, name, date of birth and dender. Then click on ‘View Instant Quotes.’
- Compare Endowment Plans: Plans that match your requirement will get displayed and you can compare and choose a plan that best suits your requirements.
- Make Payment: Choose from the available endowment plans and make the premium payment via net banking, e-wallets or debit/credit cards.
- Submit Documents: Submit documents such as ID Proof (Aadhaar Card, Pan Card, Voter ID etc.), Address Proof (Electricity bill, Passport, Ration card etc.), passport size photos, salary slips and a filled proposal form along with medical records for policy issuance.
FAQ About Endowment Policy
What are the different types of bonuses under endowment plans?
There are 2 different types of bonuses available under the endowment plan which are Reversionary Bonus and Terminal Bonus.
What is the minimum and maximum entry age for purchasing an endowment plan?
The minimum entry age for purchasing an endowment plan is 18 years and for most endowment plans the maximum age is 75 years.
What is Reversionary Bonus?
Reversionary bonus is additional money which is added to death benefit or maturity benefit and is provided at the time of maturity of policy or at the end of the policy term.
What are the key features of an endowment plan?
Below mentioned are some key features of an endowment plan:
- Provides death benefit along with maturity benefit
- Additional bonus is declared upon the policy
- Flexibility to choose premium payment frequency
- Availability of tax benefits
What are the different types of endowment plans?
Different types of endowment plans are Unit-Linked Endowment plan, Full Profit Endowment plan, Low-cost endowment plan and Non-profit endowment plan.
Why should I purchase an endowment plan?
Endowment plans provide life cover and death benefit in case of an unforeseen demise of the life assured during the policy tenure. Along with death benefit endowment plans also offer maturity benefits and allow wealth appreciation.
What are the documents required to purchase an endowment plan?
Below mentioned are the documents required to purchase an endowment plan:
- Photo ID Proof
- Address Proof
- Salary Slips
- Medical Records
- Passport Size Photographs
- Filled Proposal Form
Who should purchase an endowment plan?
Endowment plans are ideal for people who want to build a corpus to fulfill their investment goals for a long run.
Can I purchase an endowment plan for my child?
Yes, you can purchase an endowment plan for your child in case you want to be the policyholder and your child will receive the death benefit in case of your unforeseen demise.
Can I increase the sum assured of my endowment policy?
Yes, you can increase the sum assured of your endowment policy if it is allowed as per the insurance provider.