About Endowment Insurance

Endowment insurance is a life insurance policy that combines both death benefits and a savings component. Unlike term life insurance, which only pays a death benefit if the insured passes away during the policy term, endowment insurance guarantees a lump sum payout either upon the policy’s maturity or in the event of the insured’s death during the policy term. This dual purpose makes endowment insurance a popular option for individuals seeking both financial protection and savings growth.

Eligibility Factors

  • Age: Typically, individuals must be at least 18 years old to purchase an endowment insurance policy. The maximum age limit varies depending on the insurer and the specific policy terms.
  • Citizenship: Endowment insurance is generally available to Indian citizens. Non-Resident Indians (NRIs) and Persons of Indian Origin (PIOs) may also be eligible based on the insurer’s terms.
  • Medical History: Applicants may need to undergo a medical examination to evaluate their health. Pre-existing medical conditions may be taken into consideration during the underwriting process.
  • Financial Stability: Insurers may require applicants to meet certain income criteria or provide financial documents to verify their ability to pay premiums.

Premium Factors

  • Age: The age of the insured plays a significant role in determining the premium amount. Younger individuals typically pay lower premiums than older individuals.
  • Sum Assured: The sum assured, or coverage amount selected by the policyholder, directly influences the premium. Higher coverage amounts lead to higher premiums.
  • Policy Term: The length of the policy term also impacts the premium. Longer policy terms often result in higher premiums due to increased risk exposure for the insurer.
  • Gender: Insurers may take gender-based mortality rates into account when calculating premiums, with females often paying lower premiums than males for the same coverage.

Coverage

  • Death Benefit: A lump sum payment is made to the beneficiaries if the insured passes away during the policy term.
  • Maturity Benefit: A guaranteed payout is provided to the policyholder upon maturity of the policy, if the insured survives the policy term.

        Add-on Covers

        • Critical Illness Cover: Offers extra financial protection in case of a diagnosed critical illness, providing a lump sum payout for medical expenses and other needs.
        • Accidental Death Benefit: Provides an additional payout to the beneficiaries if the insured’s death is caused by an accident, enhancing financial security.

        Exclusions

        • Suicide Clause: No benefits are payable if the insured commits suicide within a specified period after policy inception, typically within the first one or two years.
        • Misrepresentation: If the insured provides false information or conceals material facts during the application process, the insurer may deny the claim.
        • War and Terrorism: Deaths resulting from acts of war, terrorism, or participation in hazardous activities may not be covered.

        Types of Endowment Plans

        • Traditional Endowment Plan: Provides a fixed sum assured and maturity benefit, offering guaranteed returns over the policy term.
        • Unit Linked Endowment Plan: Combines endowment insurance with investment options in market-linked funds, offering potential for higher returns, but subject to market risks.
        • With-Profits Endowment Plan: Offers bonuses or dividends based on the insurer’s financial performance, providing additional returns to policyholders.