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When Should You Consider Purchasing an Endowment Plan?

Published On Aug 19, 2021 5:32 PM By InsuranceDekho

Are you a person who buys things, even the expensive stuff casually just for the sake of buying something? Even when they are not required? Do you want to save yourself from this purchase mania? Wish to save for your future? Then these Endowment Plans are especially meant for habitual spenders like you. Now the question is when to buy an Endowment plan. Read on to know the right age and circumstances to buy an  Endowment plan.Before diving into the details let us first understand what actually is an endowment plan. 

What is an Endowment Plan?

Endowment Plans are essentially life insurance cum savings plans. This plan requires you to pay a particular amount of premium over a period of time at regular intervals. This helps in the creation of wealth for your future. The policyholder is entitled to maturity benefit if he/she outlives the policy tenure. The maturity benefit includes the sum assured along with additional or reversionary bonuses accrued if any. In the opposite case, the lump sum is handed over to his/her nominees. This plan encourages discipline savings as you need to pay the premium on monthly or quarterly or half-yearly or yearly basis as per your convenience.

What Are The Right Circumstances To Buy An Endowment Plan?

Every individual needs a risk-free assured investment which strengthens their financial portfolio according to their financial needs. Therefore, endowment plans are mainly required to cover three areas i.e firstly secure the future of your loved ones even after your absence and ensure that they get financial stability, secondly to achieve your long term goals with the maturity benefit, thirdly to achieve investment objectives over a long period of time. Therefore life insurance is a must for you, if you have financial dependents in your family. However you should go for an Endowment plan only when you have steady income as you need to pay the premiums at regular intervals.

When Should You Consider Purchasing An Endowment Plan?

Endowment plans provide you with added perks if you purchase them at an early age. Your 20s or early 30s is considered to be the best time to go for an Endowment Plan. This is because, if you take up an Endowment policy for 30 years at age 25, your premium would remain the same and less throughout the tenure. Otherwise, you need to pay higher premiums if you decide to invest after another 15 years. Also, the returns would be higher if you invest for a longer period. You need a lump sum by your retirement age to fulfill your after retirement needs and goals. This also helps you in inculcating disciplined savings habits from the beginning of your career. 


The longer the investment, higher the returns. Therefore it is best to buy an endowment plan at an early age to fulfill your long term goals such as buying a car, building a house, going for a vacation etc. The premium will also be low if you purchase it in your 20s. It is important to go through the terms and conditions of the policy before opting for it.

Also read 

How To Invest In Endowment Plans To Fulfill Your Financial Goals?

Who Should Buy An Endowment Policy?

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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