Endowment Policy

Endowment policies cover the insured for a specified period. Thus, the insured has the option to insure himself till he wishes to be insured. Upon the death of the insured (during the term of the policy), the nominee receives the sum assured plus the bonus, if any. Bonus is paid for the number of years the policy was in force. Upon maturity, the insured receives the sum assured plus the bonus for the term of the policy, if any. Thereafter, the insured is not covered by the policy. Endowment policies are broadly classified into two types - Endowment - Without profit and Endowment - With profit.


The endowment without profit policies are also known as term insurance plans offer the nominee the sum assured only, upon death of the insured.

Endowment- With Profit: In this type of policy the nominee receives sum assured plus bonus for the number of years the policy was in force in case of policy holder\'s death. In case of survival upto the policy term the insured receives sum assured plus bonus for the term of the policy. These policies participate in the profits of the insurance company.

Best Endowment Plans in India 2016

Endowment Policies

Entry Age(Min-Max)

Maturity Age(Min - Max)

Policy Term

Premium Paying Mode

 Minimum sum Assured

Maximum Sum assured

Premium Paying Term

Reliance Life Insurance Super Endowment Policy

8 - 60 years

22 - 75 years

14 - 20 years

Yearly, Half-yearly, quaterly, monthly

Rs10,000

No Upper Limits

7 - 10 years

Kotak Classic Endowment Policy

8 - 60 years

18 - 75 years

15 - 30 years

Yearly, Half-yearly, quaterly, monthly

Rs61,071

No Upper Limits

7 - 15 years

LIC New Endowment Policy

8 - 55 years

Nil- 75 years

12 - 35 years

Yearly, Half-yearly, quaterly, monthly

Rs 1,00,000 inmultiples of 5,000

No Upper Limits

12 - 35 years

HDFC Life Endowment Assurance Policy

18 - 60 years

18 - 75 years

10 - 30 years

Yearly, Half-yearly, quaterly, monthly

N/A

N/A

10 - 30 years

SBI Life Endowment Policy

18 - 60 years

18 - 60 years

5 - 30 years

Yearly, Half-yearly, quaterly, monthly

Rs75,000

No Limits

Minimum Premium Tenure- Single, Maximum Premium Tenure- 30 Years

Reliance Endowment Policy

5 - 50 years

18 - 60 years

10 - 25 years

Yearly, Half-yearly, quaterly, monthly

Rs65,261

No limits

10 - 25 years

Kotak Premium Endowment Policy

18 - 60 years

18 - 70 years

10 - 30 years

Yearly, Half-yearly, quaterly, monthly

Rs61, 317

No Limits

10 - 30 years

Aviva Dhan Nirman  Endowment Policy

4 - 50 years

28 - 75 years

18 - 30 years

Yearly, Half-yearly, quaterly, monthly

Rs20,0000

Rs10,00,0000

14 - 18 years

Bajaj Allianz Endowment Policy

1 - 60 years

18 - 75 years

15 - 30 years

Yearly, Half-yearly, quaterly, monthly

Rs 1,00,000

No Upper Limits

Premium Paying Tenure- 5 years

AEGON Life Premium Endowment Policy

18 - 55 years

18 - 60 years

Policy Term- 10 Years

Yearly, Half- Yearly, Monthly

10 times of annual premium

N/A

Premium Paying Tenure- 8 years

IDBI Fedral Endowment Policy

18 - 55 years

18 - 100 years

Premium paying term+ Payout period

Yearly, Half-yearly, quaterly, monthly

Rs10,000

No upper limits

12 - 30 years

Guaranteed Policy

Endowment insurance policies guarantee that a sum of money will be given to you or your beneficiaries whether you live until the insurance policy matures or you die early. The face value of an endowment policy will be given to the policyholder on the "maturity date" or to the beneficiary of the life insurance policy in the event the insured dies. The bonuses under the policy are not guaranteed. Thus with endowment policy you get the dual advantage of guaranteed policy benefits and non guaranteed bonues.

Benefits of Endowment Policy

Endowment policies give you the following benefits:
1. They are low risk plans to invest in since the maturity benefits are guaranteed.
2. The endowment policy gives your loved ones financial security.
3. Endowment policies help you avail tax benefits.

Additional Bonus on Endowment Policy

There are various types of bonuses declared by an insurance company. Bonus is an extra amount of money additional to the proceeds, which is distributed to a policyholder by an insurer. Only holders of with-profits policy are entitled to a share in these profits and the payment of this bonus is conditional on the life insurer having surplus funds after claims, costs, and expenses have been paid in particular year.
The bonuses are classified as
• Reversionary Bonus: Additional money added to the amount payable on death or maturity of with-profits policy. Once a reversionary bonus has been made it cannot be withdrawn if the policy runs to maturity or to the death of the insured.

• Terminal Bonuses: A discretional additional amount of money added to payments made on the maturity of an insurance policy or on the death of an insured person.

Rider Benefits

There are various additional rider benefits that are available for you to choose from as per your requirement certain additional benefits are as follows that cater to your comprehensive coverage.
• Accidental Death Benefit
• Accidental Permanent Total/ Partial Disability Benefit
• Family Income Benefit
• Waiver of premium Benefit
• Critical Illness Benefit
• Hospital cash Benefit

Maturity Benefits

pon surviving the term of the policy or upon the end of the policy or maturity, the insured receives sum assured plus bonus for the term of the policy. The amount receivable upon maturity is tax-free. This is the maturity benefit under an endowment policy.

What is an Endowment Policy?

Ans:

Endowment policy is a type of Life insurance policy. It covers the life insured for a specific period of time. If the Life insured survives till the end of that specified period (maturity period), he will be paid the lump sum assured along with bonuses (if any) by the Insurance Company. If the Life insured dies within the maturity period the Insurance Company will pay the sum assured to the beneficiary.

How endowment plan is different from Term insurance plan?

Ans:

The main difference between an endowment plan and term insurance plan is as follows- In case of term insurance plans, a lump sum is paid to the beneficiary if the Life insured dies within the maturity period. If the death of the insured does not occur within the maturity period, no sum is payable by the Insurance Company. Whereas in case of endowment plans, if the insurer dies before the maturity date, the nominee will get lump sum assured by the insurance company. But if the life insured survives till the policy maturity period, he will be paid the sump assured along with the accrued bonus (if any).

Can I receive bonus along with the assured sum after the policy matures?

Ans:

Yes, the life insured can get bonus, provided the policy is run for a certain minimum period of time. So it is not guaranteed.

What are guaranteed in endowment plans and what are not?

Ans:

The lump sum of money assured by the Insurer will be given to the Insured if he survives until the policy matures. If the insured dies early, that is before the policy maturity period, his beneficiaries will get the lump sum assured by the insurer. This is the only guaranteed part of the endowment policies that you will get the assured sum on the policy maturity date or before in case of early death of the insured. What is not guaranteed in the policy is the bonus. You will receive bonus or not depends on the number of years the policy was in force.

What are the different types of endowment plans?

Ans:

Endowment plans can be classified into following categories:

  • Unit linked Endowment: In this type of plans, the insurance holder chooses to use their fund for investment.
  • Low cost Endowment: This type of endowment policy helps to accumulate the sum needed to pay after a given period.
  • Full Endowment: Full endowment is the type of policy in which the sum assured is equivalent to the death benefit from the very beginning and the final payout is relatively higher.

What are the features of Endowment plan?

Ans:
Following are a few prominent features endowment plans:
  • Endowment plans are savings oriented
  • A pre-determined amount is paid to the insurance holder on maturity of the policy
  • It has high liquidity
  • It can have limited payment of premiums
  • The returns of the policy can be earned on a compounding basis, that is to say, you can earn the returns during the term of the plan
  • In case of early death, the nominee is entitled to have the sum assured or the accumulation amount, less outstanding premiums, whichever is higher
  • It helps avail tax benefits
  • As the maturity benefits are guaranteed, endowment plans are categorized as low risk plans to invest in.

What are the additional bonuses on endowment policy?

Ans:
Bonus is the money paid additionally with assured sum by the Insurance Company to the life insured. There are mainly two types of additional bonuses on endowment policy :
  • Reversionary bonus: This is the extra money that is paid additionally to the sum assured at the time of early death of maturity of the policy.
  • Terminal bonuses: It is a discretional extra amount of money paid additionally on the maturity of the policy or the early death of the life insured.

What are the rider benefits of endowment policy?

Ans:
A number of rider benefits available with endowment policies are listed as follows:
  • Critical Illness benefit
  • Family income benefit
  • Waiver of premium benefit
  • Hospital cash benefit
  • Accidental death benefit
  • Partial Disability benefit

How to know whether I should buy endowment policy?

Ans:
An endowment plan not only provides all the basic benefits of a life insurance plan but also some additional benefits like ‘double endowment’ , ‘educational endowment’ , ‘marriage endowment’ plans etc.. The policy holder is also allowed to add riders with the basis plan. But endowment plans can be a bit more expensive than any other traditional life insurance plans. Always read and understand the rules and regulations as well as the features and benefits of the policy thoroughly before buying a policy. So depending on your requirements and your financial capability you have to decide whether you should buy an endowment plan or not.

Who needs an endowment plan?

Ans:
Endowment plans give the triple benefit of life coverage, savings and wealth growth. So an endowment plan is appropriate for anyone of any age if he/she is looking for a policy which gives more than just life coverage.

Name a few good Endowment policies.

Ans:
Following are a list of popular endowment policies:
  • LIC New Endowment plan
  • Kotak classic Endowment plan
  • Kotak premier endowment plan
  • Reliance wndowment plan
  • Shriram Life Insurance – New Shri Life

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