Endowment Policy

Endowment Policy

 Endowment policies serve a dual purpose of providing life insurance coverage and accumulating savings over the policy term.

 Unlike pure term insurance, endowment policies provide a maturity benefit if the insured survives the policy term. This maturity benefit includes the sum assured along with bonuses or returns accrued during the policy period.

 A portion of the premium paid towards an endowment policy is allocated towards building a savings corpus, which can be used for various financial goals such as education, retirement, or wealth accumulation.

 Some endowment policies offer guaranteed returns, providing stability and predictability in investment growth.

 Premiums paid towards endowment policies are eligible for tax deductions under Section 80C of the Income Tax Act, and maturity proceeds are tax-exempt under Section 10(10D), subject to condition

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What is an Endowment Plan? Endowment Policy

An endowment plan is a type of life insurance policy that combines elements of savings and protection. It offers a dual benefit by providing a predetermined sum assured in case of the policyholder’s unfortunate demise during the policy term, and a maturity benefit if the policyholder survives till the end of the policy term. 

With an endowment policy, the policyholder pays regular premiums over a predetermined period, usually 10, 15, 20, or 25 years. The premiums paid by the policyholder are divided into two parts: a portion is used to provide life insurance coverage, and the remaining portion is invested by the insurance company.

An Endowment Policy can serve as a valuable tool for building a financial safety net to support both short-term and long-term financial goals throughout life. Endowment plans are designed to help individuals meet their long-term financial goals while providing a safety net for their familie

Key Features & Benefits Endowment Policy

Financial Security

The primary benefit of a life insurance policy is that it offers long term financial protection to the policyholder’s family in case of an eventuality.

Death Benefit

In case of any unfortunate event with the policyholder, the insurer provides financial benefit in the form of a death payout. The appointed nominee receives the entire sum assured plus the bonus accumulated over time

Maturity Benefits

Depending on the type of life insurance policy, insurers may offer the applicable benefit amount as maturity benefit at the end of the policy term.

Guaranteed Returns

Life insurance plans guarantee that you receive a fixed amount after a specific term. The return you get can help in paying the loan, child’s higher education, and other expenses

Wealth Creation

Certain types of life insurance policy plans, such as ULIP, endowment, or savings plans offer wealth creation benefits along with protection benefits. You can choose the types of plans based on your risk appetite and build a corpus for your future goals

Tax Benefits

Policyholders can claim tax benefits on the premiums paid under sections 80C and 80D. They can also claim tax exemptions under section 10(10D) as per the prevailing tax laws.