Endowment Plans
A Blend of Savings and Protection
An endowment plan is a life insurance policy that provides a lump sum payout either at the end of a specified term (maturity) or in case of the insured's death. These plans usually have terms of 10, 15, or 20 years, or up to a set age limit. Additionally, they may include payouts for critical illnesses. Endowment policies are typically structured as traditional with-profits or unit-linked plans. If surrendered before maturity, the insurer determines the surrender value based on the duration and premiums paid.
Types of Endowment Policies
- Unit-Linked Endowment Plan:A savings plan with life insurance coverage where premiums are invested in units of a fund selected by the policyholder.
Returns are market-linked, making this plan suitable for individuals with a higher risk appetite aiming for higher returns.
- Full/With-Profit Endowment Plan:
Guarantees a basic sum assured equal to the death benefit from the outset.
The maturity payout includes the sum assured plus any accrued bonuses, ensuring a higher final payout.
- Low-Cost Endowment Plan:
Designed to help accumulate funds for specific future needs, such as repaying mortgages or loans.
If the insured passes away during the policy term, the beneficiary receives a minimum sum assured to meet the target amount.
- Non-Profit Endowment Plan:Offers a fixed sum assured as a maturity benefit to the policyholder or as a death benefit to the beneficiary, without any additional bonuses.
- Guaranteed Endowment Policy:Ensures a lump sum payout to the policyholder at maturity or to the beneficiary in case of premature death.Bonuses, if any, are non-guaranteed, offering both assured benefits and potential additional returns.
