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Considering To Purchase An Endowment Plan - Know About Terms And Conditions Of An Endowment Plan

Updated On Dec 09, 2021

A life insurance policy with an investment component is known as an endowment policy. You won't be able to access your endowment until it reaches maturity, but you can surrender it or sell it.

Endowment Plan Characteristics

  • These plans have a long-term horizon, with a 30-year plan duration.
  • Participating in endowment plans is possible. A bonus is added to the cash promised in such policies and paid out upon death or maturity.
  • The sum assured is guaranteed upon maturity or death, therefore there are no investment risks. The sum assured on which the premium is computed is determined by the policyholder.

Considering To Purchase An Endowment Plan - Know About Terms And Conditions Of An Endowment Plan

Below are a few terms and conditions of an Endowment plan you must if you are considering purchasing an Endowment plan:

1. Death Along With Survival Benefits

If the policyholder dies before even the policy's maturity period, the candidate obtains the guaranteed value as well as additional benefits. In addition, if the assured survives longer than the insurance contract, he or she is eligible for the sum assured.

2. Returns

An endowment plan not only safeguards the policyholder's household and dependencies financially in the event of the defendant's unexpected passing but also helps the insurance create future capital. An endowment plan's payout, either for the survival advantage or the death benefit, may be much higher than that of a traditional life insurance policy.

3. Payment Frequency

The client can normally pay, single, or fixed premiums based on the coverage chosen. It is also possible to pay in annual, monthly, or monthly installments.

4. Bonuses

Incentives are provided out by insurance companies based on performance. An insurance carrier who turns a profit from his or her investments distributes a share of the earnings after each policy year.

5. Non-Guaranteed and Guaranteed Returns

Several endowment programs include non-guaranteed and guaranteed returns, as well as low-risk financial products that provide both investment and death protection.

6. Claim Process of Endowment Plan

The recipient must inform the assured as quickly as possible after the policyholder's demise. As immediately as the assurer gets information about the loss, a counterclaim is delivered to the candidate. The policyholder's recipient, candidate, assignee, or descendants must submit the claim form to receive the death benefit. The loss declaration should be provided by the last treating doctor who evaluated the life assured.

The certificate must be produced by the authorities of the hospital where the assured is being treated. Someone present at the time of cremation must offer a witness statement and a death certificate. If the insurance company requires a discharge voucher, it should be given once the voucher has been filled out.

7. Flexibility

Endowment plans offer comprehensive protection, and customers can add riders like partial/total retirement riders, disability insurance riders, accidental death riders, and so on. This influences the charges that must be paid, but it also broadens the extent of coverage.


There in the aftermath of the incident, your family will be financially secure thanks to an endowment policy. At maturity, if indeed the client lives to the conclusion of the plan's term, they will receive a set sum. Premium increases are frequently tiny, recurring sums that are spread out across time.

Endowment policies, which function as a savings vehicle, are an excellent option for someone who does not wish to invest in conventional life insurance. It can be used as a retirement saving or a long-term savings account. In contrast to endowment policies, term life insurance policies, also known as pure life insurance policies, do not allow the policyholder to retrieve the money paid to the assurer if they live the assured period.

Also read - How To Purchase A Good Endowment Plan?

Is Investing In A Endowment Plan Beneficial?

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.

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