Compare & Buy Car, Bike and Health Insurance Online - InsuranceDekho
Claim, renew, manage & moreLogin
Hurry Up!
Save upto ₹54,600 in taxes under 80C & 80D. Buy a term insurance plan now!
View Plans

Some Things You Should Know About Endowment Policy

Updated On Mar 10, 2022

Endowment plans are a type of life insurance policy that provides insurance as well as investing rewards. Endowment plans allow the insured to save on a consistent basis over a certain period of time, resulting in enhanced coverage and savings. Endowment plans enable the insured to save on a regular basis over a certain period of time in order to receive a lump-sum payout at the policy's maturity. The maturity amount is paid in order to obtain a lump-sum payout at the maturity of the policy. For the term of the insurance, the insured lives. However, if the insured dies unexpectedly during the policy's term, the policy's beneficiary receives the sum promised as well as any bonuses (if any)

Aside from that, endowment policies help to build a financial buffer for the future, allowing one to meet both long-term and short-term financial objectives.

Endowment Policy Features

The following are some features of endowment policy:

  • It may be used as an investment as well as a life insurance policy.

  • If the policyholder survives to the end of the policy's term, survival payments, also known as maturity benefits, are paid out.

  • There is plenty of liquidity.

  • The insurance provides financial stability to the life assured's family in the case of the life assured's untimely death within the policy's term.

  • In the event of an unexpected occurrence, you can borrow against your insurance.

  • Endowment insurance can be used to achieve a tax exemption.

Various Types of Endowment Policies 

Endowment plans are a form of life insurance coverage, but there are various different varieties to pick from. Endowment plans serve diverse goals and have distinct characteristics; the following are the numerous types of endowment policies:

  1. Unit-Linked Endowment Plans: A unit-linked endowment plan is a savings plan that also includes life insurance for a specified length of time. A portion of the premiums paid under this type of endowment coverage is invested in different market-linked investment options. The returns on this type of endowment insurance are determined by the success of the investment alternatives chosen by the life assured.

  1. Full Profit Endowment Plans: Full profit endowment plans enable for asset appreciation because of the bonuses declared on the endowment policy at the conclusion of each policy year. The total payment is higher. The bonus will be added to the maturity or death benefit.

  1. Low-Cost Endowment Policies: A low-cost endowment policy allows the life assured to accumulate funds that can be used to pay off obligations.

  2. Non-profit Endowment Plans: The most basic type of endowment policy, non-profit endowment plans provide a maturity benefit to the life insured at the end of the policy term if the life assured lives to the end of the policy term. A death payout is also included in such endowment insurance in the event of the life assured's untimely death within the policy's term.

Conclusion

Endowment plans combine life insurance and investment vehicles to provide both wealth growth and life insurance. Endowment plans are life insurance programs in which participants participate.

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
  • 66 Lacs+ happy customers