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Pros and Cons Of Purchasing Endowment Plans

Published On Jul 16, 2021 5:49 PM By InsuranceDekho

Endowment plans are acquired for a certain period of time and provide the policyholder with both survival and death benefits. The sum guaranteed, including any accumulated bonuses (if any), stays in the policyholder's possession once the maturity term has passed. If not, the money is distributed to the plan's designated beneficiaries. Investors are susceptible to a variety of viewpoints when purchasing an endowment plan. We've created a candid image of an endowment plan in this post to help you make an informed decision about whether or not to acquire one.

Pros of Purchasing Endowment Plans

Following are some of the advantages of purchasing endowment plans -

  • Low Risk Plans

Endowment plans are marketed as low-risk investments and are appropriate for investors with a low risk tolerance. These programmes do not work in a high-risk market and offer guaranteed rewards. It makes the strategy all-encompassing by allowing the investor who does not love the excitement of the stock market to participate. 

  • Planned Savings

Endowment plans are popular with investors because they provide a two-fold benefit. These plans offer savings as well as insurance coverage to the policyholder's family. It's a safeguarding strategy that will assist you in anticipating future requirements.

Endowment plans are popular for accumulating a savings fund for the future

Premiums are deposited at predetermined intervals, promoting long-term savings habits.

  • Maturity Along With Death Benefits

If the policyholder survives the maturity term, the policyholder is guaranteed the sum promised plus any earned bonuses.

In the event that the life assured is lost, the selected beneficiaries are paid the sum assured plus bonuses ( if any).

As a result, endowment programmes provide investors with both survival and death benefits.

Cons of Purchasing Endowment Plans

Following are some of the cons of endowment plans - 

  • Lower Returns Than Market-Linked Plans

Although receiving a large sum of money at the conclusion of the maturity term appears to be an extra benefit, the return you receive is extremely mediocre. Premiums will not provide the same kind of long-term profits as other investments.

However, keep in mind that this is not a guarantee, since the actual amount paid will be determined by the insurer's investment performance.


Endowment plans are a smart way to ensure consistent returns. By purchasing an endowment plan, investors get access to a variety of features and perks. It all boils down to the investor's desire. The information presented in this article will assist you in making informed decision.

Also read

Compare Best Endowment Plans In India

When Should You Opt For Endowment Plans?

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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