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Key Inclusions and Exclusions Under an Endowment Plan

Updated On Nov 08, 2021

Traditional insurance plans are a type of life insurance that offers a variety of benefits, including risk protection, a fixed income return, safety, and tax advantages. They appeal to people who aren't afraid of taking risks.

This form of life insurance policy offers coverage for the rest of the policyholder's life and never expires. The insurance pay-out is provided to the beneficiaries in the event of the policyholder's untimely death. These plans, which combine insurance and investing, are primarily used for wealth growth while also providing a little amount of protection. Traditional insurance plans are divided into two categories, each of which has a different target audience.

Key Inclusions and Exclusions Under an Endowment Plan

Below are a few key inclusions and exclusions under an Endowment Plan:

1. Suicide Allegation

A claim for death caused by suicide is not accepted within the first 12 to 2 years of the policy's existence. This means that during the first 1 or 2 years of the coverage, suicide death will not be covered. However, if the insured commits suicide during the exclusion period, the family members will get 80 percent of the premiums paid, subject to specific circumstances. Suicide clauses or suicide coverage are usually initially added in term insurance plans. And, depending on the terms and conditions, it is only valid for 12 or 24 months following the issuing.

2. Grace Period

Your insurance will remain in effect for 30 days after the premium due date if you have not paid the premium due. The grace period is what it's called. The coverage will lapse if the premiums are not paid after the grace period has expired. The policy's benefits will continue to be paid out if the premiums are paid on time and in accordance with the policy's terms and conditions.

3. Pre-Existing Conditions

Pre-existing diseases are illnesses that a policyholder has at the time of applying for coverage. After 48 months from the start of the insurance, these diseases will be covered under a critical illness plan. In other words, during the first two years of the policy, a claim for the occurrence of a complication originating from a pre-existing sickness will be denied.

4. Injuries Caused By Oneself

At any time during the policy term, no claim stemming from self-inflicted injuries attempted suicide, insanity, or immorality, or deliberate participation of the life insured in illegal or criminal conduct will be admissible under the policy. Even an ailment caused by intoxicating drugs, alcohol, or illegal narcotics can invalidate the claim.

5. War Clause

Any critical disease resulting from a declared or undeclared war is not eligible under the war clause. Invasion, civil unrest, such as a military coup, breach of law, insurrection, revolution, direct military action, and civil hostilities are all included in the definition of war.

6. Nomination

The policyholder can name anyone as a beneficiary to receive the policy's benefits when he dies. During the policy's term, this nomination can be made and altered at any moment. There are no limitations to how many times this can be modified.

7. Assignment

The policyholder's rights may be delegated to another individual if he or she makes an explicit request. This is referred to as policy assignment.


When you buy an endowment plan, you're trying to preserve your future and make sure you're not caught off guard when things become rough. As a result, both the customer and the service provider must be aware of the current endowment plan limits, which are in place to safeguard the well-being of their clients.

To avoid the disappointment of a claim denial during a time of loss and need, the client should understand the terms and conditions so that they may establish how and when their chosen endowment plan will expire.

Also read - Understanding How An Endowment Plan Works

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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