An endowment plans is a life insurance contract designed to pay a lump sum after a specific term (on its ‘maturity’) or on 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. They are plans that not only cover the individual’s life in case of an unfortunate event, but also offer a maturity benefits at the end of the term. After a specific period of time- called ‘maturity’- they are designed to pay a lump sum amount. The insurance company will pay this assured sum to the endowment policy holder’s nominees in case of holder’s death or to the
holder himself on a fixed date in the future. Upon maturity, the insured receives the sum assured plus the bonus for the term of the policy, if any. Thereafter, the insured is not covered by the policy.
One should consider the following before purchasing an endowment plan:
Some of the important benefits of Endowment plans include:
There are various additional rider benefits that are available for the insured to choose from as per your requirement certain additional benefits that help in enhancing the policy coverage to be as comprehensive as possible:
The salient features of Endowment policies are as follows: