Question 1

What is an endowment plan?

Accepted Answer

An endowment plan pays a lump sum on maturity if the life assured survives the term, or the sum assured to nominees on death. It combines insurance with long-term savings.

Question 2

How is endowment different from term insurance?

Accepted Answer

Term insurance offers high cover at low cost with no maturity payout. Endowment costs more for the same cover but builds a savings corpus if you survive the term.

Question 3

What are reversionary bonuses?

Accepted Answer

Participating plans may declare annual bonuses added to the sum assured. Final payout depends on insurer performance and bonus history — not guaranteed at purchase.

Question 4

Is endowment premium eligible for 80C?

Accepted Answer

Life insurance premiums qualify under Section 80C subject to premium-to-sum-assured ratios defined in the Income Tax Act for policies issued after April 2012.

Question 5

When does an endowment plan make sense?

Accepted Answer

Endowment suits conservative savers who want forced discipline and insurance together. For most buyers, term cover plus separate investments may offer better returns.

Endowment Insurance Plans in India

Endowment Plans plans

Frequently Asked Questions