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What is Endowment Plan


What is Endowment Plan?

An endowment policy is a life insurance contract designed to pay a lump sum after a specified term (on its 'maturity') or on earlier death. Typical maturities are ten, fifteen or twenty years up to a certain age limit. Some policies also pay out in the case of critical illness.

Policies are typically traditional with-profits or unit-linked (including those with unitised with-profits funds).

Endowments can be cashed in early (or 'surrendered') and the holder then receives the surrender value which is determined by the insurance company depending on how long the policy has been running and how much has been paid in to it.

Endowment insurance plans provide life insurance cover for a specific period. The insured can get the sum assured plus any bonus or guaranteed additions that may accrue during the policy term.

Endowment plans provide life insurance cover for a specified period. The important aspect is that on maturity i.e. if the insured survives the term of the insurance, he/she receives the sum assured at the end of the term.

A variation of the Endowment plan is the Endowment plan with Profit or Unit Linked Endowment plan with Profit.
In such plans, in the event of death of the insured during the term of the policy, the nominee receives the sum assured plus the bonus/participating profit/guaranteed additions, if any. The bonus or profit is paid for the number of years that the insured survives in the policy term. In case of unit-linked plans, the nominee receives the value of the investments or the sum assured, whichever is higher.
If the insured survives the term of the policy, she/he receives the sum assured plus bonus/participating profit/guaranteed additions, if any, for the entire term of the policy or the value of the investments.
The premium for endowment plans is higher in comparison to term plans. If one purchases plans with GA, the premium is higher than that for a regular endowment plan. Many companies offer an option in choosing the premium paying term.
Endowment plans are advisable if the insured wants to purchase a product that provides both - insurance cover and savings. Many people prefer to buy such policies for terms that mature during their retirement period. Often, the maturity amount is utilized to supplement the pension income.
However, there are other ways to create/supplement your retirement income. A substantial part of the premium paid for such plans is used by the insurance company to generate the bonus or profit paid to the insured or the nominee. If one chooses to impose self-discipline and invest regularly, other saving/investment avenues, such as mutual funds, offer higher returns. Click here to learn why your insurance plan is not a good investment avenue as well.

Want to know more or need assistance to select the best policy for your needs, fill up a simple form with QUICK APPLY and we shall revert to you with the best options available from the market!!!

Disclaimer: Please note that the information provided is collected from sources publicly available & we believe to be reliable. The website doesn’t warrant the accuracy, reliability & absolute information available on the website. Participation by site visitors or registered customers is on a voluntary basis. The policies are offered by various life Insurance & non-life insurance offering companies and eMediclaim does not seek to, either directly or indirectly, advise, offer, solicit or recommend that any person who is or proposes to become its member should purchase the Policy.
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Insurance Must for Foreign Students in Delhi University

Announcement by Delhi University Foreign Students Registry has declared that All the Foreign students must have some medical insurance, having evacuation clauses, before joining the University.

In a notification on DU website, students have been adviced to seek admission and provide medical insurance papers, to be eligible to pursue courses in India's premier university.