Compare & Buy Car, Bike and Health Insurance Online - InsuranceDekho
Claim, renew, manage & moreLogin

Know Why Endowment Insurance Is A Great Investment

Published On Dec 31, 2021 10:00 AM By InsuranceDekho

An endowment plan is a type of long-term insurance that offers both coverage and investment profits. In an Endowment Plan, the premium must be paid for the full term of the policy. The premium might be paid in one of the following ways:

  • In one payment, as part of the Single Premium Payment Option
  • Limited Premium Payment Option for a limited time
  • For the duration of the policy, if you choose the Regular Premium Payment Option.

If somehow the Life Assured dies within the insurance policy, the Death Allowance is given to the candidate and the plan is canceled.

Whereas if Life Guaranteed lives until the completion of the Cover Duration, the Maturity Payment will be made to the client, and the policy is canceled.

Know Why Endowment Insurance Is A Great Investment

Below are a few reasons why Endowment insurance is a great investment:

1. Provides Life Cover

Unknowns abound in life. The policyholder's children may experience financial hardships if the client dies. An endowment plan provides the principal amount to the family members in the case of just such a terrible tragedy happening during the policy's term. This portion acts as an alternative livelihood if the member was the family's primary earner.

2. Provides A Systematic Approach To Saving

In accordance with the terms and requirements of your plan, payments for your endowment program must be compensated quarterly, half-yearly, or annually. This develops the savings culture on a routine basis for you. You pay the premiums on period to achieve that you get a cash payment at the end of the term that you can use in the event of a financial crunch.

3. Assists In A Variety Of Life Objectives

Because endowment plans pay out the collected cash when the term ends, you can use it to achieve your long-term objectives. Aside from retaining it as a safety net to meet your expenses in your elder years, they could include your child's higher education, elder daughter’s marriage, or purchase of a new automobile.

4. Comes With Tax Advantages

Among the most persuasive benefits of investing in endowment, protection is to lower your tax burden. You might well be entitled to a tax deduction on the payments you make for your coverage under Section 80C of the Income Tax Act of 1961. Furthermore, per Section 10D, the death benefit is tax-free.

5. Provides Bonus

An annual bonus is part of an endowment strategy. This amount is calculated as a percentage of the total amount assured. The nominee is entitled to the sum assured as well as the total accumulated bonus in the event that the policyholder dies during the policy period. Alternatively, the policyholder may receive both the sum assured and the additional bonuses earned during the policy period if he or she survives to maturity.

6. Look For Ways To Make Payments More Flexible

Flexible payment choices are common in endowment schemes. For salaried workers, annual premium payments are ideal. Those with sporadic income, on the other hand, may benefit from a single-premium or limited-premium payment option.


Endowment plans are integrated solutions with higher insurance premiums since they include both economic and coverage protection. The estimated incentives of a contributing endowment policy are not assured and are prone to revision. Non-participating insurance only provides assured payouts and is not eligible for bonus payments. Early withdrawal may lead to losses.

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.

Popularly Opted Term Insurance Sum Assured

People Also Read

Must BuyMust Buy

Why to Buy Life Insurance Policy Online from InsuranceDekho

  • Tax benefit upto 1,50,000*
  • Claim support everyday 10AM-7PM
  • 50 Lacs+ happy customers