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Will I Get Tax Benefits With My Endowment Plan?

Published On Dec 28, 2021 10:00 AM By InsuranceDekho

If you are a spendthrift, choosing an endowment plan is a step you can take to start saving. It's the first step toward budgeting and planning for the future. Because the risks connected with endowment policies are low, it is a good idea to invest in one.

When it comes to endowment policies, the Indian Tax Department offers tax exemptions. Furthermore, in the event of unforeseen events, such as your death, the plan's other filed beneficiaries will receive a complete recovery of the settlement.

An Endowment Plan is for you if you like to play it safe and make decisions based on the risk factor.

Will I Get Tax Benefits With My Endowment Plan?

Below are a few points to remember regarding the tax benefits of an Endowment plan:

1. Tax Benefits

If you invest in an endowment plan, you may be eligible for tax benefits on both the gains and the premium you pay.

The premium paid for an endowment plan up to INR 1.5 lakhs per year is tax-free under section 80C, and the maturity benefit is tax-free under section 10(10)D if the sum assured is at least 10 times the annualized premium in all years.

2. Survival And Maturity Benefit

The most appealing feature of an Endowment plan is that you will receive your maturity gains if the policyholder lives to the end of the policy's term. An endowment plan offers this as a guaranteed reward. As a result, the amount payable in this plan is determined by the survival and maturity benefits, which play a crucial role.

3. Customer Service

When selecting an Endowment Plan, it is necessary to investigate the plan's finer points. As an illustration: How does a claim get processed? When a claim is ready to be settled, what is the size of the claim that the firm will pay? Is there any way for the organization to engage with its customers, even if it's just by email or text messages?

These are crucial information to grasp in order to comprehend how customer assistance will be provided after the purchase has been completed. You cannot transfer life insurance plans after they have been purchased, unlike health insurance plans. As a result, it is critical to assess these facts ahead of time.

4. Cost-Effective Premium

You must have in-depth knowledge of the scheme that you wish to invest in, and you should choose a scheme that best suits your lifestyle and financial capacity. The premium should be inexpensive so that you do not run into problems with premium payment. The advantages of the endowment plan, as well as any riders, should be justified in relation to the amount of premium to be paid.

5. The Reputation Of The Company

When you finally decide on a firm to acquire your insurance after much deliberation, the last thing you want is to be fooled and not receive the benefits you had hoped for in the age of relaxation or for helping out your family in the event you passed away prematurely. As a result, it's critical to look into the company's history and see if they're open about their commercial operations. The reputation of a corporation is also determined by its claim settlement ratio or CSR.


If you want to make the most of your retirement years, provide financial support to your family, and preserve money, an Endowment Plan is without a doubt the way to go. Make certain you settle on a straightforward, uncomplicated strategy.

Do read - When Is It Appropriate To Purchase An Endowment Plan?

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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