Endowment Insurance Plans
Endowment plan is a life insurance cover wherein the insurer promises to pay the insured the Sum Assured (along with accrued bonus amount), in exchange for a premium, upon maturity of the policy (policy term) or on death of the insured, whichever is earlier.
An endowment plan is in true sense a long term investment vehicle that offers a combined benefit of protection and saving. While on one hand it allows you to save systematically, on the other, it provides a comprehensive life cover in case of unfortunate death of the policy holder during the policy term.
Endowment Insurance Plan offers numerous benefits including:
- Maturity Benefits: They allow the insurer to systematically invest and reap the maturity benefits (Sum Assured + guaranteed/discretionary bonus) at the end of the policy term.
- Death Benefits: Usually available with long term maturity (15- 25 year policy term), they cover the possible risk of death during the term. Thus, the death benefits so received by the beneficiaries ensure financial stability even after the death of the policy holder.
- Low Risk Long Term Saving Plan: An endowment policy is typically for long term saving and coming from the reputed bag of LIC it cuts any form of risk involved with long term investments.
- Tax Benefits: All premiums paid and claims received under an endowment plan are exempted under Section 80C and Section 10(10D) respectively of the Income Tax Act 1961.