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ULIP V/S Endowment Plans

Published On Oct 15, 2021 10:00 AM By InsuranceDekho

ULIPs or unit-linked insurance plans, combined life insurance and wealth creation into one package. It allows the life assured to invest his money in market-linked fund options, which will help him develop his money and guarantee his financial future. The nominee will be paid a death benefit if the life assured dies prematurely during the policy term.

Based on his or her risk profile and financial goals, the life assured might choose a market-linked investment alternative. 

Endowment plans are a sort of life insurance policy that covers you for the rest of your life while also allowing you to build up a retirement fund. A death benefit and a maturity benefit are included in these policies. The nominee will get a death benefit if the life assured passes away within the policy's term. The life assured will receive a maturity benefit if he or she survives the whole policy term. 

As previously said, the risks are considerable, and the profits can be minimal, depending on market performance. If you are considering purchasing a ULIP, it is critical that you weigh all of the benefits and drawbacks before making a decision. You must be mentally ready to accept losses, even though you would prefer to see your money grow. If you're willing to take a chance, this plan is for you. Otherwise, sticking with a regular insurance plan and investing your funds in a variety of other investment tools based on your financial needs and long-term goals is the best option.

ULIP V/S Endowment Plans

The following are the key distinctions between ULIPs and Endowment Plans:

1. Benefits

ULIPs combine investment and insurance into one package. These plans offer a death benefit as well as the opportunity to build wealth through market-linked investments.

Endowment plans pay out a death benefit if the life assured dies unexpectedly, as well as a maturity reward if the life assured lives out the policy term.

2. Returns

An endowment is an unfiltered death mitigation plan that provides straightforward life insurance, whereas an endowment plan combines investment and protection. As a result, you can save money in the future using the latter.

In contrast, a ULIP does not save money in this manner. Only the stipulated death benefit will be paid to the beneficiaries of a term plan if their loved one passes away. You'll get the total amount you've saved when the endowment policy's term expires.

3. Risk

The life assured's market-linked investment option determines the degree of risk.

Because endowment plans do not give the option of investing in market-linked products, they are risk-free.

4. Withdrawals

ULIPs allow partial withdrawals at any time during the policy duration, and the life assured can do so at any time.

Partial withdrawals are not permitted from endowment plans.

5. Objective

ULIPs are long-term investment plans that invest in a variety of market instruments to give your money with both protection and growth.

Endowment plans are designed to provide coverage. Your returns will be predictable because you will not be investing in any market instruments.


There is a fundamental difference between Unit Linked Insurance Policies and Endowment Plans. Endowment programs, on the other hand, pay you a terminal benefit at the conclusion of the policy term if you live to the end of it. Endowment plans offer you a maturity benefit at the conclusion of the policy term if you survive the entire policy term, while unit-linked insurance plans enable you to build your corpus through various market-linked investment options. Because you choose to put your money in market-linked investing tools, endowment plans are risk-free. Because you choose to put your money in market-linked investment instruments, unit-linked insurance products do carry some risk.

Also read - How to Invest in Equity through ULIPs?

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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