Endowment Plan

In Life Insurance, we have many investment plans, with the benefits of Life Insurance Coverage, to encourage investment habits of the insured person and fulfill his future financial goals.

One of the best plan in Life Insurance industry is Endowment Plan.

In Life Insurance Industry, there are components like Premium, Sum Assured and Death Benefit. But in Endowment Plan, we have one another component Survival Benefit too.

Endowment Plan is a contract between insurer and insured which has maturity and provides Lump-Sump survival benefit on the maturity of the plan with its core benefit of the Life Insurance Coverage.

Usually, maturity in Endowment Plan can be choose for 15 Years, 20 Years or 25 Years per your future financial goal, and your insurance coverage will be for same period as opted for the maturity period.

What we get at maturity? Basically, we get paid by the insurer, all premiums with Bonuses at the maturity. Bonus for each year can’t be fixed percentage by insurer, it paid on the basis of calculations every year on the basis of the profit in the specific plan, under IRDA rules and regulations.

Will there be revised sum-assured, after including the bonus? It’s depends upon the insurer and plan. Like some insurer(including my insurer) include the bonus as re-investment in plan and provide double benefits to the insurer;

  1. Your Death Benefit will increase on yearly basis per the bonus add-up.
  2. Your next year bonus will be calculated re-investment of last year.

while some oldest insurer don’t provide these benefits to their customers(insured) and there will be same sum-assured even after 25 years of policy as it was for first day.

Endowment Plan can be beneficial for

  1. Child Education Planning
  2. Child Marriage Planning
  3. For planning the lump-sump amount after a specific time period to fulfill the financial goals.

Amit Saxena

Financial & Insurance Consultant
MaxLife Insurance Co Ltd & MaxBupa Health Insurance

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