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What Is Meant By Pure Endowment? Check It's Features

Updated On Feb 06, 2024

If you're looking for a way to save for a specific purpose, a pure endowment life insurance policy can be a good option. Building a corpus for future financial requirements is also advantageous.

To be eligible for a payment, you must pay your premiums on time during the policy's term and live to the end of the policy's specified duration. The fact that this policy does not pay a death benefit is another noteworthy characteristic. This means that if the policyholder dies before the policy's term expires, the policyholder's family will not be compensated.

Many insurance professionals advise purchasing an endowment policy in addition to a conventional term policy or any other life insurance plan with a death payout. While the other policy may assist you in preserving your family's financial future, a pure endowment policy can help you save a small amount for your future financial goals regularly.

These strategies also assist you in maintaining financial discipline. The money you'll get after the policy's term can be used for a variety of things, like paying for your child's school, marriage, or even paying off your mortgage.

What Does Pure Endowment Mean?

Below are a few things you must know about Pure Endowment plans:

1. Maturity

If you survive long enough to retire, you will get the guaranteed amount, as well as any collected bonuses and, in some situations, a one-time bonus. Even though the Endowment policy appears to have a high rate of return, you only get about 5% every year. Your insurance coverage is extremely limited when compared to a Pure Insurance Policy, which offers a high level of coverage for a fraction of the price of an Endowment Policy. 

2. Savings

There is no saving factor in the former, whereas there is one in the latter. A Pure Insurance policy requires you to pay a premium for a certain length of time (usually no more than 35 years), after which the Insurance amount is paid to the Nominee if something happens during that time. If you make it to the conclusion of the term, you will be given nothing. You can pay a greater premium and get your money back if you live.

3. A Certain Amount Is Paid

A pure endowment is a type of life insurance in which the carrier guarantees to pay the insured a specific sum of money if the life assured lives to the end of the policy's term. Typically, this cash is provided in a single payment. 

4. No Beneficiaries

Unlike a traditional life insurance policy, a pure endowment has no beneficiaries, which means the insurance company will not pay out any benefits if the life assured does not live to the end of the policy period.

5. Probably Illegal

Unless they're combined with a traditional life insurance policy that pays out to beneficiaries when the life guaranteed dies, pure endowment policies are generally prohibited by your state's life insurance rules. Term insurance is often added to pure endowment coverage. If the life assured lives longer than the policy's term, they will get a payout, which is typically equal to the number of premiums paid. Pure endowment assurance is another term for a pure endowment.

6. Premiums Must Be Paid

To receive a reimbursement from the insurance provider, the life assured must continue to pay premiums and live until the policy's specified expiration date. As a result, this policy is void.


A risk-averse insurance plan, a pure endowment policy is. However, a pure endowment plan may not be enough to cover your insurance needs; you'll need to get a conventional policy to ensure your family's financial security even if you're not around.

A pure endowment is a form of life insurance policy in which the insurance provider agrees to pay the life assured a set sum of money if the life assured is still alive at the end of a set length of time. Typically, these payments are made in one big sum.

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 is meant for general information purposes only. Readers are advised not to rely on the article's contents as conclusive and should research further or consult an expert in this regard.

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