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Things to Know About Endowment Policy

Published On Oct 22, 2021

An endowment policy is a type of life insurance policy in which a set amount of money is paid to the assurer after a set length of time or to the assurer's family members after the assurer's death. The money earned at maturity can be used for a variety of things, including a child's education, marriage, home purchases, and retirement savings.

With so many investment alternatives on the market these days, it's becoming increasingly difficult for general people to comprehend how to invest money to get the best results in the future. Endowment policies assist such people by providing them with not only life insurance but also a financial goal for the future.

Things to Know About Endowment Policy

Below are a few things to know about Endowment Policy:

  • Additional Benefits

Money saved through an endowment policy can be used for a variety of purposes. The family receives the money as well as bonuses if the insurer dies. 

  • Different From Life Insurance Policies

Unlike life insurance, an endowment policy serves to safeguard the future of your family after you pass away. When comparing endowment policies to life insurance policies, the payout for survival and death benefits is higher.

  • Flexible

Some criteria, such as critical sickness, permanent disability, or accidental death coverage, can be added to the base plan to improve it.

  • Premium Payment

Month by month, weekly, half-yearly, or annual payments can be made.

  • Tax Exemptions

Policyholders are free from paying taxes on premiums under section 80C, as well as on maturity and payouts under section 10D.

Benefits Of Buying An Endowment Policy

Endowment policies serve as a safety net for future savings and provide a structured approach to saving for the future. They are a source of savings that will assist the family in the event that the principal earner dies. While the profits are smaller than term plans, the dangers are also fewer, making it a hassle-free investment. If the assured lives to the end of the insurance period, he or she is entitled to the whole sum.

  • Purchasing Of Plan

Every family's primary or secondary breadwinner will benefit from an endowment policy. Anyone with a steady source of income and future responsibilities, such as a family to care for, should think about purchasing one of these policies.

Salaried people, small business owners, and professionals should consider this insurance since they can provide financial independence and security without putting their lives in danger. While there are many different types of life insurance policies available, an endowment plan provides both protection and the ability to invest for the future.

  • Benefits Of Both Death And Survival

Endowment plans are unique in that they guarantee the payment of benefits to the policyholder if she or he survives the plan's term, as well as entitle her/nominee(s) to the sum assured plus various additional bonuses if the policyholder dies within the plan's period. As a result, an endowment plan can provide both death and policy survivor benefits.

  • Increased Profits

Because of the extra benefits, endowment plans have higher total returns than typical life or term insurance plans. The plan's benefits are bigger because, in addition to the ordinary sum assured, additional payable amounts are merged.


Endowment plans are private insurance that provides specific benefits in terms of a total sum assured plus different bonuses to the policyholder at the end of the plan's term or to the policy holder's nominee(s) in the case of the policy holder's death before the end of the term. Endowment plans are essentially insurance products with the added benefit of offering the investor a savings option. An endowment plan provides main plan advantages, such as a sum assured to the policyholder's nominee(s) in the event of the policyholder's death during the policy term, as well as the opportunity to obtain maturity bonuses if the policyholder survives the policy period.

Also read: 

What Is The Right Time To Purchase An Endowment Policy?

Benefits Of An Endowment Policy Which Makes It A Must Have

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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