An endowment policy is a life insurance policy that provides insurance coverage and a savings plan. This plan combines both Pure term insurance and a pure endowment plan. We all know Term insurance offers you only death benefits. The endowment policy gives you both maturity benefits and death benefits. With Regular Investment, Policyholders can achieve future milestones like Children’s education, sons’ and daughters’ marriages, Retirement plan, and buying a house.
Policyholders get their sum assured on a fixed date in the future as per the term and conditions of the policy. However, for any sudden death of the insured person, the insurance company provides the sum assured (plus a Bonus, if any) to the policyholder’s nominee.
If you are looking to invest in an endowment policy, you need to do a quick research about the available product in the market and pick the best one suitable for you.
Why should you buy an Endowment policy?
The sum assured offered by a term insurance policy is paid only if the policyholder dies within the policy term. However, this is not the case with endowment plans. This plan gives you both maturity benefits and death benefits. An endowment policy not only helps your family in case of your death but also helps you take care of large expenses that come later in life, such as education of children, children’s wedding, medical procedures, retirement needs, buying a house, etc. that’s why you need to buy an endowment policy.
Best Endowment Plans Available in India 2022
Some of the best endowment policies available in India have been listed down
|Policy Name||Entry Age (Minimum to Maximum)||Maturity Age(Minimum to Maximum)||Policy Term||Premium Paying Mode||Minimum Sum Assured||Maximum Sum Assured||Premium Paying Term|
|Aviva Dhan Nirman Endowment policy||4 to 50 year||28 to 75 year||18 to 30year||Yearly, Half-yearly, quarterly and monthly||Rs.2 lakhs||Rs.1 crore||14, 15, 16 or 18 years|
|AEGON life premium Endowment policy||18-55 year||18-60 year||10 year||Yearly, Half-yearly, and monthly||10 times of annual premium||N/A||8 year|
|BSLI vision Endowment policy||1-55 year||N/A||20 year||Yearly, Half-yearly, and monthly||Rs.1 lakh||No Limit||7-10 year|
|Bajaj Allianz Endowment policy||1-60 year||18-75 year||15-30 year||Yearly, Half-yearly, quarterly and monthly||Rs.1 lakh||No Limit||5 Year|
|Bharati AXA Life Elite Advantage Plan||6-65 Year||75 Year for 10 Year policy and 77 Year for 12 Year policy||10- 12 Year||Yearly, Half-yearly, quarterly and monthly||Depand upon Premium||N/A||5 Year for 75 year policy and 7 Year for 77 year policy|
|Exide Life Jeevan Uday Plan||0-55 year||70 year||10,15 or 20 Year||Yearly and Half-yearly||42000||No Limit||10 Year|
|LIC’s New Endowment Plan||8-55 Year||75 Year||12-35 Year||Yearly, Half-yearly, quarterly and monthly||Rs. 1 Lakh||No Limit||Throughout the policy period|
|Future Generali Assure Plus||3-55 year||70 Year||15-20/25 Year||Yearly, Half-yearly, quarterly||Rs. 1 Lakh||No Limit||7, 10, 12 ,15, 17 or 20 years|
Best Endowment Policy Company in India
Aditya Birla Sun Life
PNB MetLife India
Edelweiss Tokio Life
Why should you compare Endowment policies online?
You must have got some idea about why should you buy an endowment insurance plan online. Because it is more convenient, you will get more options, the premium amount will be reduced, and many more benefits. Now, let us know about it in detail.
1. It is easy and convenient: – Comparing endowment policy online is very easy. Because you have to just search on Google and you will get a list of all the insurance companies available. Then you can check all your requirements, compare them and finally take the best policy according to your requirement.
Again comparing Endowment online is convenient. Because you do not have to go anywhere. You can check the authenticity of the companies and compare them in the comfort of your home. Hence it is also less time taking.
2. It is free and you can do it anytime: – You do not have to spend a single penny to compare life insurance online. Because you do not have to go anywhere for this. Also, you can do it any time, as you can search for all the companies just sitting at your home.
3. To get a better and more affordable premium: – You can compare more companies while comparing them online. Hence, you can get better life policies as compared to comparing the policies offline. Again, while comparing the different policies, no agent is involved. So, expenses related to the agent will be reduced. Also, other paperwork-related expenses will also be reduced. Hence, the overall premium the amount that will decrease.
4. To get the required plan: – While comparing the life policy online, you will get all the information about the policy. So, according to your requirement, you can buy the right policy. While searching offline, you cannot do this as there you will not get these many options to compare.
5. To get additional benefits: – When your compare the endowment policies online, no points will be left out. So, you may know about some benefits as compared to offline.
6. To take a more informed decision: – While comparing life insurance online, as you are getting all about the terms and conditions, you can take a more informed decision.
7. To take the right add-ons: – During the online comparison, you will get to know about all the add-ons, the companies are providing. So, you can choose the right add-ons which are required for you. Hence, you can save yourself from unnecessary expenses
How does an Endowment policy work?
Like all life insurance plans, you have to pay a premium amount as per the decided mode like Yearly, Half-yearly, quarterly and monthly. A part of this premium will go towards the sum assured, a small part will cover your fees and administrative charges, while another part will be invested for you in bonds, funds, and other secure investment forms. when your investment amount grows and the company gains some profit then the insurance company gives you some bonuses. Some endowment policies give you extra benefits like annual bonuses and bonuses at maturity.
you can add riders to enhance your protection and get higher death or maturity benefit. If the insured dies before the date of maturity, his/her nominee will receive the death benefit, which includes the sum assured amount (bonuses if any). If the policyholder survives the policy term, the insurer pays the maturity benefits proceeds as per the policy terms. So for a slightly higher premium amount, you get both life protection and saving at the end of the tenure.
What are the Types of Endowment Policies:
The following types of endowment plans are available in the Indian market currently:
Unit Linked Endowment Plan
Under the Unit Linked Endowment Plan, The Insurance Premium is divided into multiple units held under a specific investment fund chosen by policyholders, and the return depends on Market performance.
Full/With Profit Endowment Plan
Under this plan, the Basic amount, i.e. the sum assured, will be provided to the policyholder. The sum assured amount was decided at the time of policy purchase. If the policyholder survives the policy term, then the policyholder gets a Maturity benefit. If the policyholder dies during the policy term, then the nominee receives Death benefits.
Low-Cost Endowment Plan
This type of endowment plan is designed to help the insured accumulate a fund for the future, which have to be paid after a particular time period. Generally, low-cost endowment plans are used to repay loans, mortgages, etc. In case of the policyholder’s death during the policy term, the target amount is paid as a minimum sum assured to the beneficiary of the policy.
Non-Profit Endowment Plan
In Non-profit traditional endowment policies, the policyholder does not get a part of the company’s profits. These policies do not pay any extra bonuses to the policyholder. The insurance companies only provide maturity benefits or death benefits.
Features and Benefits of an Endowment Policy:
Death along with Survival benefits: Endowment policies provide death and maturity benefits. In case of insured death during the policy term, the nominee/beneficiary receives the sum assured(with bonus, if any ). If the Insured survives the policy term, then Policyholder receives maturity benefits with a bonus that varies from insurer to insurer.
Higher Returns: An endowment plan not only provides financial protection to the insured’s family or depended but also endowment plan help to meet your future financial goal. The payout for an endowment plan’s death benefit and survival benefit is higher than pure life insurance.
Premium Payment Frequency: The policyholder can make payment of the premium based on the chosen by him/her. Premium payment frequency can be done on a monthly, quarterly, half-yearly, and on yearly basis.
Flexibility in Cover: Insured can add riders on the core insurance product, such as critical illness, total disability, and accidental death, to the plan and increase their life cover. A few plans also offer premium payment waivers in case of permanent disability or critical illness.
Tax Benefits: The insured gets tax exemption on both the premium payments and maturity or final death payouts under Section 80C and Section 10(10D).
Low Risk: Endowment policies are safer than other investment plans like mutual funds or ULIPs, as the amount is not invested directly in equity funds or the stock market.
Endowment vs Term insurance
|Endowment Plan||Term Plan|
|An endowment Policy provides you with a financial cover like death or maturity benefits and a saving plan.The premium of endowment plans are higher then term insurance policy because it offers maturity benefit along with additional loyalty bonus (if any).The endowment policy does not offer a high sum assured compared to term insurance because the endowment is a saving cum insurance plan, which offers maturity benefits|
In the endowment plan, the nominee receives the sum assured amount with a bonus in case death of the insured person during the policy term. Policyholders receive maturity benefits if the insured person survives the policy term.
|Term Insurance policy provide you only Financial protection like death benefits. The premium of term insurance policy are Lower the Endowment policy because there is no maturity benefits and bonusThe term insurance plan offers a higher sum assured amount, as it offers only Financial protection.In term insurance plan, the nominee/ beneficiary receives the sum assured amount as a death benefit in case death of the Policyholder during the policy term.|
How to choose an Endowment Policy?
We all know the different types of endowment policies available in the market. But several factors must be kept in mind while choosing the right endowment policy. Factors like income, current living stage, how many depend on you, and your needs should be considered when choosing the right policy. other factors are listed.
Premium Mode: Select an endowment plan which offers you options to choose the number of years you would like to pay. the premiums, and the frequency of such payments like monthly, quarterly, half-yearly, and yearly.
Rider Benefits: In the Endowment policy, you can also get the rider benefits like critical illness, total disability, and accidental death to the plan and increase their life cover, but you have to pay some extra amount to enhance your policy.
Claim Settlement ratio: The claim settlement ratio of an insurance company’s number of claims settled against the number of claims filed: the higher the ratio, the better the insurer. The highest Claim settlement ratio is the better insurance company.
Solvency Ratio – A life insurance company with a high solvency ratio is more likely to be financially stable and, therefore, have more chances to pay out your insurance claims and survive for a long time. The higher the ratio, the better its ability to settle your claims.
Factors to Consider when you choose an Endowment Policy
Began Plan Early: Always consider “the earlier, the better” as it offers a long horizon for your investment to grow your money and help to achieve your financial goal. It will help the insured build a corpus and facilitate disciplined saving.
Select a plan that offers you riders: Rider provides additional benefits and customizes your endowment plan. In endowment policy, some insurance companies provide additional riders like education endowment, double endowment policy or a marriage endowment policy.
Review flexibility option: Insurance companies offering endowment plans provide flexible options, i.e. in case an individual is salaried, they can choose the regular payment option. If an individual has an irregular income, they choose the single or limited payment option.
Bonuses: The insurance company provides bonuses as per the company’s performance. When the insurance company makes a profit from its investment, It distributes a small part to the policyholder at end of every financial year.
Non-Guaranteed and Guaranteed returns: Endowment policies offer low-risk insurance and dual benefits of death cover and saving features; many of these policies provide guaranteed and non-guaranteed returns. The guaranteed returns, such as the guaranteed sum assured amount, are payable on maturity or death benefits, but non-guaranteed returns include bonuses depending on the market’s performance.
Riders available under Endowment Policy
The following riders can be chosen with an endowment policy, these are optional
Critical illness: if the policyholder is diagnosed with a critical illness like cancer, heart attack, paralysis, kidney failure, etc., if taking this rider, the policyholder gets a lump sum amount.
Accidental Death: When the Policyholder chooses this additional rider, the insurance company pays the additional accidental death benefit with death benefits given to the beneficiary nominee.
Disability: This rider is proven as one of the Beneficial riders as it provides financial protection to the insured in case of permanent or partial disability.
Waiver of premium: Through this rider, if the insured cannot pay the endowment policy premiums, the policyholder suffers from a critical illness or is permanently disabled. Total premium paid by Insurance company.
Hospital Cash Benefits: In the case of policyholder Hospitalize then this rider provides your daily allowance as well as post-hospitalization benefits to the insured person.
Following are the documents required to apply for an endowment plan
- Identity proof (AADHAR card, PAN card, etc)
- Age proof
- Address proof/ proof of residence
- Filled proposal form
- Medical Reports
- Any additional documents ask by insurer
Claim Process of Endowment Policy
There are two types of the claim process in an endowment policy.
- Death Benefits
- Maturity/Survival Benefits
If the insured person dies during the policy term, their family must file a claim to receive death benefits. Here is the process to claim the death benefits.
Fill out the claim form: the first step, of course, is to fill out the form you need to submit to the insurance company properly and proper documents along with the form you need to submit to start the claim process. The nominee should sign the claim form.
Below are the other documents that are required at the time of the claim
- Original Death Certificate
- Original Policy Documents
- Identity Proof of the Nominee with passport-size photos
- Medical Reports of the Policyholder
- Copy of FIR if accidental death
- Postmortem report
- Additional document asked by insurance company
In the case of the Endowment type of Policies, the amount is payable at the end of the policy term. The insurance company that services the policy sends out a letter informing the date on which the policy monies are payable to the policyholder at least two months before the due date of payment.
- Discharge Form duly completed
- The Policy Document,
- Copy of identity proof
- Copy of Address proof
- Copy of Age Proof
- Bank Details
Once the document sends to the insurance company, the company verifies the document if all documents are correct then maturity amount send to the policyholder’ bank account after the maturity date.
What is an endowment policy?
An endowment policy is a type of life insurance policy designed to provide both Maturity and Death benefits. This can be used to build a savings corpus while providing Financial protection to the family members in case of the death of the policyholder during the policy tenure.
How endowment plan is different from Term insurance plan?
Term insurance provides financial protection coverage for a specific number of years. During this term, if the policyholder dies, their family is entitled to a death benefit of a pre-determined sum assured amount. But an endowment policy is an insurance cum investment plan. In this plan, you can get higher returns with lower risk.
What are the bonuses on the endowment policy?
There are two types of bonuses on endowment policy (i) Reversionary Bonus (ii)Terminal Bonus
Reversionary Bonus: The additional amount payable on maturity or death benefits declared by the insurance company. Also, once a revisionary is announced, it can’t be withdrawn even if the policy matures or on the death of the policyholders.
Terminal Bonus: The insurance company will add an additional amount of money after a competition of a fixed term, like 10 or 15 years, to the payment made on the maturity of the policy or death of the insured person.
What is the right time to buy an endowment plan?
The right time to buy an endowment policy is in the 20s or early 30s. Buy an endowment policy early to start saving. The better will be the benefits you will receive on the maturity of your endowment policy.
What are Riders?
Rider is the additional insurance benefit you may choose while buying an endowment policy. These riders help in case of critical illness, disability, additional accidental death cover, and Waiver of premium. The riders come at an extra cost.
Does the endowment policy offer tax benefits?
Yes, An endowment plan comes with tax benefits because the payable premiums, as well as the death or maturity benefits, are eligible for tax exemption under Sections 80C and 10D of the Income Tax Act, 1961.
Do endowment policies payout on death ?
Yes, if the policyholder dies during the policy tenure, then the sum assured amount providing to the nominee/beneficiary as death benefits.
Can I purchase an endowment policy online?
Everyone can purchase an endowment policy online from insurance company websites, web aggregators, and brokers.
Who needs an endowment policy?
Anyone who wants to buy an insurance cum investment policy without taking much risk can buy an endowment plan. These plans allow triple benefits of insurance, savings, and wealth creation.
Can I increase the sum assured of my endowment policy?
Yes, you can increase the sum assured of an endowment policy, if it’s allowed as per the terms and conditions of the insurance company.
What are the documents required to purchase an endowment plan?
Following are the documents required to apply for an endowment plan
Identity proof (AADHAR card, PAN card, etc)
Address proof/ proof of residence
Filled proposal form
Any additional documents ask by insurer
How many Types of Endowment Policies?
Basically, there are Four types of endowment policy available in the market
Unit Linked Endowment Plan
Full/With Profit Endowment Plan
Low-Cost Endowment Plan
Non-Profit Endowment Plan