Endowment insurance plan

Endowment insurance plan

An endowment insurance plan is basically a combination of a term insurance plan and a pure endowment plan. It offers death cover if the life insured dies during the term of the policy or survival benefit if the life insured survives until the maturity of the policy. 

Key points 

• Endowment insurance plans pay a specified amount on maturity of the plan if the life insured survives the entire term of the plan. 
• Death cover: these plans also have a death cover element. If the life insured dies before the maturity of the plan then the death cover benefit is paid to the nominee/beneficiary. 
• Savings element: these plans, apart from the death cover, also have a savings element. After deducting the death cover charges and administration charges from the premium, the remaining amount is invested by the insurance company on behalf of the life insured. The returns earned are later paid back to the life insured in the form of bonuses. 
• Goal-based investment: these plans can also be bought for accumulating money for specific plans like a child’s higher education or marriage etc. 
• Some insurance companies also allow partial withdrawal or loans against these policies. 
• This plan also comes in different variants. Some plans have a higher death cover than the maturity benefit and vice versa. 
• In some plans the maturity benefit is double the death cover. This type of plan is known as a double endowment insurance plan. 

Anand Khemka
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