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  • Endowment Plans in India - An Overview

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    What is an Endowment Policy?

    A traditional insurance plan pays out a lump sum assured in the event of the death of the policyholder. The beneficiaries/dependents/nominees of the life insured receive a benefit (called a death benefit) if the worst should come to pass for the insurance holder. An endowment plan works the same way, but has an additional clause that states that a lump sum payment will be made to the insurance holder if he or she survives till the end of a specified period known as the “maturity period”, “endowment policy term” or “survival term”. There are variations to the payout clause in endowment policies – some companies have a lump sum payout on the detection of a critical illness, or other life changing events.

    Key Features of Endowment Policies:

    • Sum assured in an endowment policy is payable either on survival to the term or on death occurring within the term.
    • Endowment policies are available as ‘With Profit’ and ‘Without Profit’ plans.
    • Under Endowment policies, bonus for the full term is payable on the date of maturity or in the event of death, whichever is earlier.
    • Premiums for endowment policies can be limited to shorter term or can be paid as single premium.
    • Premiums cease on death or on expiry of the term, whichever is earlier.

    Benefits of Endowment Policies:

    Endowment policies carry plenty of benefits, a few of which are listed below:

    • An endowment policy will provide insurance cover during the policy term.
    • An endowment policy will pay out a sizeable lump sum amount at the end of the policy term i.e. once the policy has matured.
    • An endowment policy works to serve a dual purpose. Not only does it work as an insurance policy but also serves as a long-term investment offering decent returns.
    • Endowment policies come with tax benefits.
    • In terms of investing, endowment policies are relatively safer than other types of investments and offer returns which are close to those offered by mutual funds.
    • Endowment policies enable long-term savings.
    • With an endowment policy, you can be assured of receiving a considerable amount upon maturity.
    • Most endowment plans will extend insurance coverage and the promise of benefits even after the maturity date, in some cases up to a time when the life insured attains the age of 100.
    • Policy holders have the options of opting for additional riders which provide cover for specific illnesses, critical illnesses, disabilities, etc.

    How Do Endowment Policies Work?

    Endowment policies are not very different from regular insurance policies. These policies, like insurance policies, not only provide cover to the life insured, but also help them save regularly over a specific period of time. Once the policy has matured and given that the policy holder has survived the policy term, they will receive a lump sum maturity amount which can be utilized for meeting financial needs like purchasing property, children’s education, organizing a wedding or preparing for one’s retirement.

    Are endowment plans for you?

    The decision to take on an endowment plan must be well thought out and its benefits, returns on investment, etc. must be compared against those of similar investments.

    If you are a healthy individual in need of life insurance cover and an investment that helps you save on tax in addition to giving you huge returns, you may choose to opt for a combination of financial products, or opt for a single endowment plan which does the same thing.

    You may purchase a life insurance policy and invest in a separate mutual fund, etc. and expose yourself to the risks involved in a mutual fund investment. It’s quite ideal for those with a high risk appetite. For those who find that their life savings are too valuable to leave to chance, an endowment life insurance policy is ideal.

    An endowment policy is far less risky than a mutual fund investment, and also has ULIP options which invest in various equity and debt schemes. In addition to being a tax saving investment with guaranteed returns at the end of the term, it also provides comprehensive life insurance cover – which is a win-win situation for the investor (and his dependents).

    There are arguments against endowment plans because the returns on investment are not as high as those offered by mutual fund, equity and debt related investments of similar amounts for similar tenures. Purchasing two separate financial products – one for a life insurance policy and one for a product directed to give you returns on investment will pay off better with a higher percentage of returns. That being said, it must be noted that while there are better options for returns on investments, endowment policies are first and foremost insurance policies. They just have the added benefit of giving you a return on the premium you’ve invested – on plan maturity.

    Consider your risk appetite and requirement for life insurance cover before taking any major financial decision.

    Types of Endowment Policies:

    There are 3 types of basic endowment policies which one can choose from.

    • Unit Linked Endowment - Under Unit Linked policies, the insurance premiums are directed into multiple units held under a specific investment fund which can be chosen by the policyholders.
    • Full Endowment – Under this policy, the basic amount ensured to be provided will be equal to the death benefit, right from the start of the policy. Depending on the speculated market-based appreciation, the final payout provided is comparatively higher.
    • Low Cost Endowment – This endowment plan has been introduced with the intention of allowing individuals to accumulate the funds which have to be paid after a specified time period, usually mortgage.

    How to Choose an Endowment Policy?

    Just like other insurance plans, the market is now flooded with different types of endowment policies. There are several factors which come into play, when it comes to choosing the right endowment insurance policy. Individual needs, current life stage, income and risk appetite are just a few factors to consider. Given that the premiums of endowment plans are pricier as compared to term plans, cost of premiums is also a deciding factor. After premium costs, another crucial factor to keep in mind is the insurance provider’s track record in terms of the bonus payments. Beside these, some other factors to keep in mind would be the customer service provided by the insurer, their claim settlement ratio, financial status of the insurer, etc. when choosing an endowment policy, pick one which is simple and does not come with features and benefits which are difficult to comprehend and the finer details of the policy may get lost in the fine print.

    Documents Required:

    In order to apply for an endowment policy, customers will mostly be required to submit basic documentation such as the following:

    • Fully filled Application form/Proposal form.
    • Photograph.
    • Proof of residence / address proof.
    • Proof of age.
    • Medical reports (only if required).

    Endowment Policy Premium Calculator:

    With the Endowment Plan Premium Calculator you can know the details like Premium amount, maturity value, surrender value, loan value and returns of the Policy. Endowment Policy Premium calculators will ask you to input information like your age, policy term and amount of sum assured. Using this information, the calculator will compute the premium which you will be required to pay towards your endowment policy.

    Riders For Endowment Policy:

    Most endowment policies offer add-ons to enhance the protection provided by the policy. Some of the riders commonly available with endowment policies are as follows.

    • Critical illness
    • Waiver of premium
    • Accidental death and dismemberment
    • Accelerated sum assured
    • Partial and permanent disability
    • Hospital cash

    Some Popular Endowment Plans In India:

    Reliance Endowment Plan

    • Sum Assured plus vested bonuses on maturity, subject to 100.1% of premiums paid.
    • Death benefit of 10 times the annualized premium or base Sum Assured plus vested bonuses. Either that, or 105% of all premiums paid.
    • Policy term from 10 – 25 years.
    • Loan against policy available

    Kotak Classic Endowment Plan

    • A participating endowment plan providing coverage up to 75 years of the life insured.
    • Yearly bonuses applicable from the first year.
    • Wide range of term options.
    • Tax benefits under Section 80C and 10(10D) of the Income Tax Act, 1961.
    • Riders available to enhance protection.

    Kotak Premier Endowment Plan

    • Receive 5% p.a. (simple) of basic Sum Assured as Guaranteed Additions during the first 5 policy years.
    • Bonuses accrue from the 6th policy year onwards.
    • Regular or limited premium paying term for 5, 7, 10 or 15 years for different term combinations.
    • 7 additional riders available.

    LIC New Endowment Plan

    • Minimum sum assured of Rs.1,00,000.
    • Death benefit no less than 105% the total premiums paid.
    • Death benefit is the higher of basic Sum Assured or 10 times the Annualized premium.
    • Accidental death and disability rider available.

    Shriram Life Insurance - New Shri Life

    • Life cover plus reversionary bonuses.
    • Advance premium payment option with a discount.
    • Additional protection available through riders.
    • Minimum Sum Assured of Rs.50, 000.
    • Monthly, quarterly, half yearly and annual modes of premium payment.

    Endowment Policy FAQs

    1. Q.Are there any tax benefits provided by Endowment Policy?

      A. Endowment policies do offer tax benefits under Section 80C and 10 (10D) of the Income Tax Act.

    2. Q.What is the process for cancelling an Endowment Policy?

      A. The general procedure to cancel an Endowment policy requires individuals to visit their insurance provider along with the necessary documents like the original policy document, ID proof, Surrender / Cancellation Form and a cancelled cheque for the purpose of fund transfer. While the cancellation procedure may differ with each insurer, hence it is wiser to contact your insurer to get to know the procedure.

    3. 3.Q.What happens when I surrender my Endowment Policy?

      A. In the event that you are not satisfied with the endowment policy or it is not fulfilling your requirements, you are under no obligation to continue with it. Policy holders have the option of exiting their policy before its maturity term and surrendering it. If a policy holder decides to withdraw his Endowment policy before the maturity period is over, it is called surrendering the policy. If an individual surrenders his policy, then the cover provided by the policy, along with the added benefits will cease to exist. For instance, LIC allows surrender of endowment policies only after the premiums for 3 full policy terms have been paid. In case the policy holder exits and surrenders the policy before this (3 term) time period, then they will not receive any payout.

    4. 4.Q.What is meant by a paid-up endowment policy?

      A. If a policyholder has paid premiums on their policy for a minimum of 3 years, they have the option of converting their endowment life policy to a paid up endowment policy. In case you are not satisfied with the endowment policy which you’ve taken but do not wish to surrender your policy, you can choose to not pay the premiums any longer. While your policy will continue till it reaches maturity, the sum assured amount will however be reduced.


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    GST of 18% is applicable on life insurance effective from the 1st of July, 2017

    Endowment Plans Reviews

  • Page 1 of 50 1 2 3 4 5
    • LIC Life Insurance
      "Satisfied with the services"
      0.5 5.0/5 "Blown Away!"
      I have taken a insurance from LIC. It is a term insurance. The tenure is for 25 years and the premium is normal and I pay it by cash in the office. I pay the fee on a half yearly basis. The customer services are good. The sum assured and the benefits are good.
      Was this review helpful? 0
      , ahmedabad
      Reviewed on Aug 21, 2018
    • LIC Life Insurance
      "Good Policy"
      0.5 4.0/5 "Great!"
      I have a life insurance policy with LIC from last 10-11 months and it is a long term policy. The name of the policy is Jeevan anand so i pay my premium once in 3 months through online and i am convenient with the payment options. The tenure period for this policy is 15 years.
      Was this review helpful? 1
      , chennai
      Reviewed on Aug 17, 2018
    • SBI Life Life Insurance
      "Good Policy"
      0.5 4.0/5 "Great!"
      I have my life insured with SBI LIFE from last 2 years and it is a short term policy. I am happy with the returns and benefits of this policy. I pay my premium once in a year through ECS and i am convenient with the payment options. The tenure period for this insurance is 5 years.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Aug 17, 2018
    • LIC Life Insurance
      "Good Policy"
      0.5 4.0/5 "Great!"
      My life is insured with LIC from last 2 years and it is a long term policy. The name of the policy is jeevan anand and the maturity period for this policy is 20 years. I pay my premium once in a year through net banking and i am convenient with the payment options.
      Was this review helpful? 0
      , bangalore
      Reviewed on Aug 17, 2018
    • LIC Life Insurance
      "Good Policy"
      0.5 4.0/5 "Great!"
      I have a life insurance policy with LIC from last 5 years and it is a long term policy. I am happy with the returns and benefits of this policy. I pay my premium once in 6 months by cash and i am convenient with the payment options. The maturity period for this loan is 21 years.
      Was this review helpful? 1
      , noida
      Reviewed on Aug 17, 2018
    • LIC Life Insurance
      "Good Policy"
      0.5 4.0/5 "Great!"
      I have a life insurance policy with LIC from last 8 years and it is a money back policy. I get a money back of Rs 20000 every 5 years. I pay my premium once in 3 months through direct payment and i am convenient with the payment options. I am happy with the coverage and returns of this policy.
      Was this review helpful? 0
      , chennai
      Reviewed on Aug 17, 2018
    • Reliance Life Life Insurance
      "Not satisfied"
      0.5 1.0/5 "Really Bad"
      I hold a life insurance policy with LIC from last 2 years and it is a long term policy. Service was not up to the mark as they said the returns will be given after 9 years. The tenure period for this policy is 11 years, I pay my premium once in a year through online.
      Was this review helpful? 1
      , hyderabad
      Reviewed on Aug 17, 2018
    • Reliance Life Life Insurance
      "Good policy"
      0.5 4.0/5 "Great!"
      My life insurance is with Reliance life. The tenure is for 24 years. There is also a Accidental coverage for ten lakhs. I need to pay my premium of 48K on a yearly basis only to the 12th year and after the 12th year I would get a money back and after the 24th year I would get the sum assured.
      Was this review helpful? 0
      , chennai
      Reviewed on Aug 16, 2018
    • LIC Life Insurance
      "GOOD SERVICE "
      0.5 3.0/5 "Satisfactory"
      Information about the insurance policy was given correctly by the agent, this LIC premium is low i feel, i have been paying it around 15 years, it will be deducted from my salary, its useful for me as the insurance will be benefited in future.
      Was this review helpful? 0
      , chennai
      Reviewed on Aug 14, 2018
    • LIC Life Insurance
      "Best Policy"
      0.5 5.0/5 "Blown Away!"
      I have taken jeevan anand policy form Life insurance corporation of India . Its been 5 years am making the payment through their office every half yearly. I have chosen this policy based on the good returns after certain years . This policy has 20 years of tenure period with coverage of 55 years.
      Was this review helpful? 1
      , bangalore
      Reviewed on Aug 13, 2018
    • LIC Life Insurance
      "GOOD "
      0.5 3.5/5 "Pretty good"
      Not much words about the life insurance because i will be paying it yearly premium, i have started making payments for this life insurance like 7 years ago, at the time of taking the policy the processing also was easy, also they guided well for the same.
      Was this review helpful? 0
      , chennai
      Reviewed on Aug 13, 2018
    • LIC Life Insurance
      "Better Service"
      0.5 4.0/5 "Great!"
      I've a life insurance policy with the LIC. I am paying a premium of 22000 per year. Even after the implementation of the GST the premium still remains the same. SO far there hasn't been any issues with their services.
      Was this review helpful? 1
      , new delhi
      Reviewed on Aug 13, 2018
    • LIC Life Insurance
      "Better Service"
      0.5 4.0/5 "Great!"
      I've got two life insurance policies with the LIC. I am paying a premium of 33000. The premium is paid online. I never had any issues with their services. Being a govt company the security for your investment is guaranteed.
      Was this review helpful? 0
      , new delhi
      Reviewed on Aug 13, 2018
    • Max Life Insurance
      "Good Service"
      0.5 3.5/5 "Pretty good"
      I've a life insurance policy with the Max Life. I am paying a premium of 17000 per annum for a sum assured of 1 Crore. It has not got any other additional benefits. So far there hasn't been any issues with the policy and their services.
      Was this review helpful? 1
      , new delhi
      Reviewed on Aug 13, 2018
    • LIC Life Insurance
      "Good Service"
      0.5 5.0/5 "Blown Away!"
      I've a life insurance policy with the LIC. My father is an employee of the LIC and we're familiar about most of their products. There hasn't been any issues with their services so far. I'd recommend LIC to anyone who is looking for zero risk investments.
      Was this review helpful? 0
      , chennai
      Reviewed on Aug 13, 2018
    • LIC Life Insurance
      "Good overall"
      0.5 5.0/5 "Blown Away!"
      I have taken numerous policies from LIC. It was once the policy got matured and they have complete all the formalities within an hour and I got the sum assured. I also have an endowment policy, the tenure for this policy is for 12 years. Good overall.
      Was this review helpful? 0
      , korba
      Reviewed on Aug 13, 2018
    • LIC Life Insurance
      "Satisfied with the service"
      0.5 5.0/5 "Blown Away!"
      The other term insurance I hold with LIC is for the tenure for 12 years. The sum assured and the plan benefits are good. The nominee will get the benefits of the policy. Earlier I had a policy with LIC which got matured and I got my benefits as soon as possible.
      Was this review helpful? 1
      , korba
      Reviewed on Aug 13, 2018
    • LIC Life Insurance
      "Nice experience"
      0.5 5.0/5 "Blown Away!"
      There are good benefits for the benefits in the endowment policy. The customer services are really good. The tenure is for 16 years. The sum assured and the plan benefits are also good. The payment options are convenient too. LIC has been a traditional and secured company.
      Was this review helpful? 0
      , korba
      Reviewed on Aug 13, 2018
    • LIC Life Insurance
      "Experience is good"
      0.5 5.0/5 "Blown Away!"
      I also have taken a term insurance with LIC. The tenure is for 15 years. The agent whom I got the policy from also takes the payment. The benefits of this policy would be for my nominee. I am happy with LIC as they are quick to provide the benefits after the maturity.
      Was this review helpful? 0
      , korba
      Reviewed on Aug 13, 2018
    • LIC Life Insurance
      "Satisfied with the service"
      0.5 5.0/5 "Blown Away!"
      My life insurance is with LIC. I have taken a money back policy. The tenure is for 15 to 20 years. I would also get the bonus every few years. The payments are done online and also through the agent whom I got the policy from. It is a very trustworthy company.
      Was this review helpful? 0
      , korba
      Reviewed on Aug 13, 2018
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