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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
      "Excellent service"
      0.5 5.0/5 "Blown Away!"
      I have been using my life insurance with Life insurance corporation of India, there service is good, the agent had explain me about the policy coverage,and about plan benefits clearly,the premium amount they have charged me was nominal,and it use to get auto debited from my account.
      Was this review helpful? 0
      , bhubaneshwar
      Reviewed on Dec 12, 2018
    • LIC Life Insurance
      "Excellent service"
      0.5 5.0/5 "Blown Away!"
      I have been using my life insurance with Life insurance corporation of India, there service is good, the agent had explain me about the policy coverage,and about plan benefits clearly, and the premium amount they have charged me on yearly basis, and they have charged me up to 7000 it is nominal , and premium amount it use to get auto debited from my account.
      Was this review helpful? 0
      , bangalore
      Reviewed on Dec 12, 2018
    • LIC Life Insurance
      "LIC is trustable company"
      0.5 5.0/5 "Blown Away!"
      I have just selected Life Insurance Corporation of India for my life insurance policy because its recommended by my father. Total tenure period of the policy is 20 years. Overall, i have not faced any kind of issues with Life Insurance Corporation of India.
      Was this review helpful? 0
      , lucknow
      Reviewed on Dec 12, 2018
    • LIC Life Insurance
      "LIC is good for future"
      0.5 5.0/5 "Blown Away!"
      I have purchased the LIC policy for last 5 years. My father has recommended me about this policy. I have been paying the premium of Rs. 6000 and i have selected the yearly payment mode. I used to make the payment through online by using my debit card. Overall, I'm satisfied with LIC.
      Was this review helpful? 0
      , lucknow
      Reviewed on Dec 12, 2018
    • LIC Life Insurance
      "Best Policy"
      0.5 5.0/5 "Blown Away!"
      I have taken Jeevan anand policy from the life insurance corporation of India . It has coverage of accidental and critical illness benefits . Am satisfied with the premium amount which am making yearly , I make the payment through online banking . I have chosen this policy based on the benefits and features . Overall am satisfied with this policy .
      Was this review helpful? 0
      , mumbai
      Reviewed on Dec 12, 2018
    • LIC Life Insurance
      "Good policy"
      0.5 4.0/5 "Great!"
      I have taken life insurance jeevan policy from Life insurance corporation of India . This policy covers with accidental coverage and critical illness coverage . This is good policy with good benefits . Overall am satisfied with customer service and response .And making the payment half yearly through on line net banking.
      Was this review helpful? 0
      , new delhi
      Reviewed on Dec 12, 2018
    • LIC Life Insurance
      "Good policy"
      0.5 4.0/5 "Great!"
      I have taken life insurance policy from the life insurance corporation of India . I pay the premium amount quarterly which i make the payment through online . The policy coverage with accidental benefits and critical illness .i have chosen long term policy where the premium amount is bit expensive comparing to other policy
      Was this review helpful? 0
      , new delhi
      Reviewed on Dec 12, 2018
    • SBI Life Life Insurance
      "Average policy"
      0.5 3.0/5 "Satisfactory"
      I have got the sum assured amount of Rs. 2 lakhs. I have purchased the accidental policy with SBI. I used to pay the premium amount of Rs. 500 in a year. This is a tax benefits policy. My entire family has been covered by this accidental policy. Since my bank account with SBI hence i have chosen this company.
      Was this review helpful? 0
      , guwahati
      Reviewed on Dec 12, 2018
    • LIC Life Insurance
      "Cool policy"
      0.5 4.0/5 "Great!"
      I have purchased my LIC policy in 2008 and the policy name is Jeevan Anand. This policy having a tenure period of 25 years. I used to pay the premium of Rs. 2000 in a every half year. The sum assured amount was Rs. 2 lakhs. This is a tax benefitable policy. Its because of the trust i have selected LIC.
      Was this review helpful? 0
      , jodhpur
      Reviewed on Dec 12, 2018
    • HDFC Life Life Insurance
      "Yet to experience the policy"
      0.5 4.0/5 "Great!"
      I have purchased a ULIP policy from HDFC Life. 4 months before i have taken this policy. I have been paying the premium amount of Rs. 2000 every month. The sum assured amount is 5 lakhs. This is a tax benefitable policy. Through Internet i have purchased this policy. I make the payment in online by using the debit card.
      Was this review helpful? 0
      , mumbai
      Reviewed on Dec 11, 2018
    • LIC Life Insurance
      "Jeevan ke saath be and Jeevan ke baath be"
      0.5 2.5/5 "Just OK"
      Total tenure period of the policy is longer one. I would have opted for short period of time. The explanation procedure of the policy was not happened when i purchased the life insurance policy with LIC. I never been contacted the LIC customer care. I have taken the policy 10 years before. Total tenure period of the policy is 20 years. I have been paying the premium amount of Rs. 11500 per annum. The sum assured amount is Rs. 2 lakhs.
      Was this review helpful? 0
      , mumbai
      Reviewed on Dec 11, 2018
    • HDFC Life Life Insurance
      "Best policy"
      0.5 5.0/5 "Blown Away!"
      I am having a life insurance policy with HDFC LIFE from last 9 years and it is a long term policy. I make my premium payment through online and on yearly basis. I am convenient with the payment options and tenure period for this policy is 15 years. I am happy with the returns and benefits on this policy.
      Was this review helpful? 0
      , kolkata
      Reviewed on Dec 11, 2018
    • LIC Life Insurance
      "Excellent service"
      0.5 5.0/5 "Blown Away!"
      I have been holding my life insurance with Life insurance corporation of India from past 6-7 years, and the agent of LIC was know person so he suggested me best policy and there premium amount they have given me was nominal and there is no hidden charged , and i pay premium through on line.
      Was this review helpful? 0
      , bangalore
      Reviewed on Dec 11, 2018
    • LIC Life Insurance
      "Very Good Policy"
      0.5 4.5/5 "Excellent!"
      I have purchased the Life insurance policy with LIC. 8 years ago, i have taken the Jeevan Anand policy. They are having so many policies but most of the times i just took the policy for the tax benefits. I have selected the payment mode for every six months.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Dec 11, 2018
    • LIC Life Insurance
      "Good Policy"
      0.5 4.5/5 "Excellent!"
      My Jeevan Raksha policy was purchased from Life Insurance corporation of India. I took this policy 3 years before and just because of the tax benefits i have purchased. I make the premium yearly once and i used to pay the premium amount by cash.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Dec 11, 2018
    • LIC Life Insurance
      "Good Policy"
      0.5 4.5/5 "Excellent!"
      I feel LIC is a very good company to take the insurance policies hence i have selected my Jeevan Anand policy 4 years back with this company and I'm very satisfied with the LIC services. I have chosen the payment mode by cash, and i make the premium six months once
      Was this review helpful? 0
      , hyderabad
      Reviewed on Dec 11, 2018
    • ICICI Prudential Life Insurance
      "More than satisfactory"
      0.5 5.0/5 "Blown Away!"
      I have taken a life insurance from ICICI Prudential. It is a cash back policy and the policy coverage and the plan benefits are fine and satisfactory. The payment options are also fine as I can pay my premium with ease online. The customer support is supportive.
      Was this review helpful? 0
      , new delhi
      Reviewed on Dec 11, 2018
    • HDFC Life Life Insurance
      "Good policy to take"
      0.5 5.0/5 "Blown Away!"
      Total tenure period of the policy is 10 years. I have to pay the premium amount for 7 years and 3 years will be lockin period. They have done a very good follow up on documentation and explained the policy details very well. They will call on the premium time. The amount will be auto debited from account. In a year, i have to pay the premium amount of Rs. 50000. 1 year back, i took this policy.
      Was this review helpful? 0
      , amravati
      Reviewed on Dec 11, 2018
    • SBI Life Life Insurance
      "Its Better"
      0.5 5.0/5 "Blown Away!"
      SBI LIFE premium amount is around Rs. 15k for one year it has the total tenure of 20 years, I am paying the premium I am not sure about the benefits, after the tenure I get Rs. 3lakhs, tax benefits is good, I make online payment, I can track the life insurance through online.
      Was this review helpful? 0
      , new delhi
      Reviewed on Dec 11, 2018
    • LIC Life Insurance
      "Its Good"
      0.5 5.0/5 "Blown Away!"
      I have Jeeven anand policy, I used to pay the premium around Rs.18,000 for one year, I get the benefits amount after 18 years, they have life coverage of Rs. 4 lakhs and tax benefits. Payment mode is good I used to make the payment through online.
      Was this review helpful? 0
      , new delhi
      Reviewed on Dec 11, 2018
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