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Significant Features Of An Endowment Plan

Updated On Oct 06, 2021

Do you have a habit of wasting money on unnecessary purchases? Do you ever wonder why you used up all of your money? Do you find yourself wanting to save but unable to do so? Then you should consider an endowment plan!

An Endowment Plan is a way to save money. It's straightforward, simple, and open. Endowment plans are intended to pay out a lump sum payment at the end of the policy term, also known as maturity, or upon the policyholder's death. In addition to insurance coverage, it provides a living benefit to the policyholder in the form of payouts.

Returns are paid to the policyholder at death or after a set number of years of premium payments. Endowment plans integrate insurance coverage with the opportunity to invest. If the life assured dies within the policy term, the nominee receives a death benefit under this plan. The maturity benefit is paid if the life guaranteed lives to the end of the insurance term. Because it is a participating plan, this plan provides assured addition. You can also get tax benefits with this plan.

Significant Features Of An Endowment Plan

Below are the significant features of an Endowment Plan:

1. Brings Maturity Advantages

This plan includes a maturity benefit in addition to life assurance. A maturity bonus to the life is assured if the life promised survives the whole insurance term. You can invest your money in the long run with the help of this approach. This benefit will motivate you to save money in a disciplined manner.

2. Provides Additions That Are Guaranteed

Endowment plans are participating plans, which means the insurance company will declare annual additional incentives on the policy. After the premium payment term finishes, endowment plans provide guaranteed additions. The guaranteed additions are delivered as part of the death benefit if the life assured dies during the policy term or as part of the maturity benefit when the policy matures.

3. Tax Advantages

The insurance premiums on life insurance are tax-deductible under Section 80C of the Income Tax Act of 1961. Under Section 10(10D) of the Income Tax Act of 1961, the maturity amount receivable is also eligible for tax relief. 

4. Dual Purpose

Serves one person Dual Purpose Endowment plans are a form of life insurance plan that provides both life insurance and an investment opportunity to the life assured. You and your loved ones can have a financially secure future with this plan. You might increase your corpus to ensure that you have sufficient financial resources to meet your future financial obligations.

5. It Offers A Death Benefit

Because it is a combination of income and savings plans, this plan provides life to the assured. The designee receives the entire sum assured amount if the life assured dies during the policy period. Even if you aren't present, this plan assures that your family seems to have enough money to pay the bills.

6. Riders With Extra Charges

Additional riders can be added to the policy to increase the protection coverage for an additional premium. Critical-illness riders, Accidental Riders, Education Riders, and others are among these riders.

7. Loan Facility

The client could use an endowment policy to access loans after three complete premium payments. As a result, loans against the Policy are possible.

8. Payment Methods

The policyholder has the option of paying premiums on a yearly, half-yearly, quarterly, or monthly basis.


An endowment policy incorporates financial and income protection in one package. In the event of the life assured's untimely death, the nominee gets paid an amount assured. This plan also includes a maturity benefit, which means that if the life guaranteed lives to the end of the policy term, he or she will get a maturity benefit at plan maturity. As endowment plans are participating plans, they also provide assured additions in the form of a yearly bonus declared on the policy during the policy term.

You may also like to read - Advantages And Limitations Of An Endowment Plan

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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