An endowment policy is basically a life insurance policy which, apart from covering the life of the insured, helps the policyholder to save regularly over a certain time, so that he/she gets a lump sum amount on the policy maturity in case he/she lasts the policy term. A life insurance endowment policy pays the complete sum assured to the beneficiaries if the insured expires during the policy term or to the policyholder on the maturity of the policy if he/she survives the term. Hence, it fulfills the dual necessity for savings and life cover under a common plan.

1. What is Endowment Life Insurance Policy?
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2. Introduction
• An endowment policy is basically a life insurance policy
which, apart from covering the life of the insured, helps
the policyholder to save regularly over a certain time, so
that he/she gets a lump sum amount on the policy
maturity in case he/she lasts the policy term.
• A life insurance endowment policy pays the complete
sum assured to the beneficiaries if the insured expires
during the policy term or to the policyholder on the
maturity of the policy if he/she survives the term. Hence,
it fulfills the dual necessity for savings and life cover
under a common plan.

3. How does it differ from Whole Life
Policy?
• The difference is that endowments take a shorter
coverage period and mature sooner, usually in 10-20
years, whereas the Whole life policies are meant to
last for the insured’s whole life and thus they
mature when the policyholder touches the age of 95
or 100. It has a less probability that the whole life
policies mature.
• And, Endowments characteristically have relatively
higher monthly premiums, the shorter the
endowment term, the higher the premiums — while
whole life policies frequently have relatively lower
monthly or annual premiums.

4. Need:
• There is a fallacy very prevalent in the market today that a term
plan is unusable, because if you live the term, there is no profit
by way of a lump sum pay out.
This is the way a term plan is made.
• You live – no payout.
• You don’t last – your family is protected.
• As a reason of the apparent disadvantage of the term plan, that
it does not provide anything profitable to the policyholder in
case he or she survives the term of the policy, the insurance
companies came up with a new form of insurance product
known as the Endowment policy.

5. The Endowment Policy Working Process:
• It all begins when you make monthly or annual payments.
• A part of your monthly sum is used to buy life assurance which
depends on your age, gender and time of endowment validation.
• The remaining of your payment is invested either on a with-
profit basis or a unit-linked basis. The magnitude of the lump sum
you get at the end of your endowment often depends on the working
of these investments.
• How your money is invested:
• As mentioned above, your money is invested in a with-profit basis.
This means your savings are joined with other investors’ money and
invested by the insurance company in a range of diverse investments,
naturally including shares, fixed-interest investments and property.
• This pool is utilized to meet the costs of running the insurer’s
business and then the left over (the profits) are shared with you and
the other investors by stating bonuses that increase the value of your
policy.

6. Some Of Best Endowment Plans (2016):
• Reliance Life Insurance super endowment
policy
• Kotak classic endowment policy
• LIC New endowment policy
• HDFC Life Endowment assurance policy
• SBI Life endowment policy

7. TYPES OF ENDOWMENT POLICY:
• Basically, There are two broad types of endowment policies
– with profit and without profit. In these two categories,
different dissimilarities are structured to help policyholders
meet different financial objectives, such as savings,
children’s education/marriage, retirement, pension etc.
• The different types of endowment plans are:
1. Unit Linked endowment policy:
 These are the life insurance policies where the premium is
presented in units of a total insurance fund. Units can be
redeemed to cover the cost of the life assurance. The
insurance policy holders get to choose the funds where
their premiums are to be invested in and in what fraction.

8. 2. Full endowments policy:
 This is a very profitable insurance plan where the basic
sum guaranteed equal the Death Benefit at the start of
the policy and, if the insured selects growth option, the
concluding payout would be much higher than the sum
assured.
3. Low cost endowment policy:
 The main aim of a low cost endowment policy is to pay
off. It promises a yearly growth rate, but does not
guarantee of paying off your loan (for which you might
have taken the policy) in full at maturity.

9. Others:
4. Limited payment endowment policy
5. Double endowment policy
6. Joint life endowment policy
7. Unitized with profit endowment policy
8. Non-profit endowment policy

10. FEATURES OF ENDOWMENT POLICY:
• Double benefit
• Trustworthy
• Well-organized savings
• Secure bonus
• Compounding returns
• Loan facility
• Double tax benefits
• High liquidity
• Quality flexibility
• Additional benefits

11. THANK YOU
An Endowment Plan can be your best bet if you want a
policy that gives more than just life cover.
If you like our suggestions and review.
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