Can I customize an endowment plan as per my needs?

Yes, if your endowment life insurance policy offers different plan options with different policy terms and premium payment terms, you can choose a sum assured and a premium payment mode as per your needs and budget and customize your policy.

What does an endowment plan do?

An endowment plan helps you make systematic savings through your policy and receive a guaranteed lump sum payout at the end of the policy term. Moreover, life insurance endowment plans also offer life insurance protection to you and your family so that in the event of an unfortunate occurrence, they are able to support themselves.

When is the best time to opt for an endowment life insurance plan?

You should start planning a life endowment policy once you have your future financial goals planned out. This can start as early as your 20s or later in your 30s as well. Since endowment plans offer flexible premium payment options and policy terms, you can choose how many years you want to invest in an endowment plan.

Is it possible to surrender an endowment plan?

You may choose to surrender your endowment plan as long as the premiums for the first two years have been paid under the Limited and Regular Pay. However, it is recommended that you do not surrender your endowment plan as the maturity benefits can help you achieve your financial goals.

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Q: What is an endowment plan?

An endowment plan is a form of savings life insurance policy that helps you save your funds over the policy term for a lump sum maturity benefit at the end of the policy term. Endowment plans also offer a life insurance cover to help protect your family’s financial future with a death benefit.

An Endowment policy is a type of life insurance that combines savings and protection. The policy is designed to help you save systematically... Read more while simultaneously securing the future financial stability of your family. It provides a guaranteed lump sum upon maturity or a death benefit to your nominee. Life cover and guaranteed² returns provide a safety net for your family. Endowment policies provide maturity and death benefits that can help you achieve a variety of financial objectives.Read Less

An Endowment policy is a type of life insurance that combines savings and protection. The... Read more policy is designed to help you save systematically while simultaneously securing the future financial stability of your family. It provides a guaranteed lump sum upon maturity or a death benefit to your nominee. Life cover and guaranteed2 returns provide a safety net for your family. Endowment policies provide maturity and death benefits that can help you achieve a variety of financial objectives.Read Less

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¹Premium illustration for a 21-year-old healthy male with a 10-year premium paying term, a 15-year policy term, and monthly payments under the Endowment plan option, receiving a lump sum at age 36 years.

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What is an Endowment Policy?

Endowment policy refers to a life insurance plan that provides both insurance coverage and a savings component. The policyholder pays regular premiums, which contribute to accumulating savings over the policy term. If the policyholder dies during the term, the nominee receives the sum assured, providing financial protection. If the policyholder survives the policy term, they receive a lump sum amount, which can be used to meet planned long-term goals.

The main purpose of an endowment plan is to help individuals meet long-term financial goals by providing disciplined savings with a life cover. It also serves as a security net for dependents. Endowment plans are designed to align with long-term financial objectives such as retirement, children’s education, or marriage.

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How does an endowment policy work?

Here’s how an endowment policy works.

01

Selection of policy & coverage amount

The first step involves choosing the right endowment plan and determining the sum assured that suits your financial needs and long-term goals.
02

Payment frequency

Policyholders decide on the frequency of premium payments, which can be monthly, quarterly, or annually, depending on affordability and convenience.
03

Customization for goal

Endowment plans can be customized to align with specific objectives, like covering education costs, house purchase, or retirement planning.
04

Maturity benefit payout

On completion of the policy term, the policyholder receives the maturity amount subject to the terms of the plan. It includes the sum assured and bonuses, if any.
05

Death benefit

If the insured person passes away before maturity, the nominee receives the death benefit, which helps ensure financial security for the family.
06

Tax benefits

Premiums paid towards an endowment savings plan may be eligible for tax³ deductions, and the maturity or death proceeds can also be tax-exempt under applicable regulations.

Features of an Endowment Plan

The features of the endowment insurance plan are as follows:

01

Dual Benefits

Endowment plans are preferred because they offer the benefit of life insurance as well as savings. These plans also assist you in building your savings throughout the policy term for the fulfilment of your goals. This ensures that you and your family can be protected against uncertainties while you save for your future.
02

Guaranteed Returns

The returns on an endowment insurance policy are guaranteed², and while purchasing the policy, you can easily choose the lump sum amount you want to receive on maturity. Moreover, since endowment policies are low-risk investments, you may not lose any of the declared amount on maturity and can utilise the entire lump sum amount.
03

Maturity benefit

The maturity component helps ensure that the policyholder receives a fixed sum along with any accumulated bonuses at the end of the policy term, providing financial protection.
04

Bonus additions

Some endowment insurance policies also provide bonus amounts during the policy term, which are added to the sum assured and may increase the total maturity amount if declared.
05

Flexibility

Endowment plans provide flexibility in selecting the premium amount, payment frequency, and policy term, which may help policyholders plan according to their long-term financial goals.
06

Loan facility

Certain policies allow policyholders to borrow funds by using the surrender value of their endowment policy as collateral. The surrender value is the amount accumulated in the policy over time, which can be accessed without terminating the policy. This allows access to funds quickly without ending the policy.

Benefits of an endowment policy

Long-term savings

You can choose the number of years over which you want to save through the endowment policy and pay premiums accordingly during the policy term. This ensures long-term savings until the plan matures, allowing you to receive the benefits.

Tax benefits

The premium payments of the endowment insurance policy are eligible for tax³ benefits under Section 80C of the Income Tax Act, while the lump sum benefit received on maturity is tax-free under Section 10(10D) of the Income Tax Act.

Financial protection

The life insurance cover of your endowment life insurance helps your family receive an assured death benefit in case of your untimely demise during the policy term to help them out financially in your absence.

Secures long-term goals

The lump sum returns from your endowment policy may help you commit to the fulfilment of long-term goals. You can plan for major financial obligations in the future, such as setting up a trust fund or funding significant investments.

Guaranteed returns

Since the endowment plan returns are guaranteed², it becomes easier for you to plan out your future goals. Depending on the amount you want to save and the policy term, you can time your financial plans accordingly.

Why should you buy an endowment policy?

The following are some of the reasons to buy an endowment policy:

Regular savings:
An endowment policy helps you save an amount each month or year, as per the premium payment term of your choice. Over the years, this might help you develop a regular habit of saving funds for your future. The maximum limit of the savings you accumulate depends on the maximum limit your insurance company allows you to invest.
Maturity benefits:
Long-term financial goals, such as purchasing a new home, paying for your child’s education, or starting a new business venture, may require a substantial amount of funds. You may require these funds as a lump sum rather than in small payouts. When your endowment insurance policy matures, you are entitled to the lump sum benefit to fulfil your goals.
Life insurance:
Endowment plans come with a protective life insurance cover that can help your family lead a financially comfortable life in case you are not around to look after their needs. The life cover is built alongside your savings. Therefore, in the case of an emergency, you may not have to worry about not having an alternative arrangement for your family’s financial stability.
Lower risks:
As compared to market-linked investments, an endowment plan carries potentially lower risk, which may make it preferable for low-risk investors. By saving your capital in a systematic way over the years, you can accumulate savings that you can receive on maturity. Since this amount is a guaranteed² benefit, there is a minimal risk of losing funds. Additionally, you can utilise the lump sum for your future financial goals.
Tax benefits:
Endowment insurance offers tax benefits³ on premiums paid under Section 80C and tax-free maturity or death benefits under Section 10(10D), subject to conditions.
Goal-based saving:
Endowment policies encourage disciplined saving over the long term, which may help policyholders achieve financial goals like education, housing, or retirement.
Flexibility and customisation:
Policyholders can choose coverage, premium frequency, to customise the plan as per personal financial needs and risk tolerance.

Types of endowment life insurance plans

Various types of endowment insurance plans are available. You can choose the best endowment plans based on your financial goals and premium affordability.

Unit linked endowment plan (ULEP)

ULIPs (Unit-Linked Insurance Plans) combine life insurance with market-linked investment. It works by setting aside a portion of your premium for life insurance and investing the rest in market funds you choose (equity, debt, or a combination).
Investing in these funds offers higher returns but also more risk, as the payout depends on their performance. This product is ideal for moderate and high-risk investors seeking the potential for wealth creation combined with the security of a life insurance policy.
Endowment with full profits

These plans offer guaranteed benefits when they mature; they are also called participating endowment plans.
At maturity or death, it guarantees² a certain amount. Based on the insurer's performance, non-guaranteed bonuses (like reversionary and terminal bonuses) are added to the guaranteed² amount.
There is a stable, predictable base return with the possibility of earning additional income. The plans can be suitable for individuals looking for reliable, low-risk investment options.
Low-cost endowment

With this type of endowment plan, premiums are lower, making it more accessible for people with long-term financial goals, such as children's education, taking out loans, and securing a post-retirement fund.
The primary objective is to accumulate a fund equal to future liability. Instead of focusing on high growth, the focus is on capital accumulation at a minimal cost.
It is designed to generate modest returns, just enough to cover the amount targeted. This is ideal for people who need to pay off a long-term debt, such as a home loan, or fund a specific goal
Non-profit endowment

This type does not include bonuses or profit sharing. Instead of variable returns, the policy offers fixed, guaranteed2 returns. Maturity and death benefits are predetermined and stated clearly when you buy the policy. Bonuses do not affect the results.
The term "non-profit" simply means that you are not a participant in the insurer's profits. The payout is as expected, offering complete predictability.
People who value absolute clarity and certainty in their financial planning and are risk averse may find this plan appropriate.
Note: "Non-profit" does not mean the plan is charitable. Basically, it means no additional earnings beyond the benefits promised.
Guaranteed policy

In a guaranteed² endowment policy, the policyholder receives a fixed amount upon maturity or as a death benefit.
A policy guarantees² a certain sum of capital to the policyholder or nominee. Market fluctuations or the insurer's investment performance do not affect this amount. The final return is fixed and secure, providing a strong sense of security.
If you are concerned about the safety of your capital and wish to know the final payout amount in advance, this option is ideal for you.
Limited premium payment endowment policy

In this policy, you pay premiums for a shorter period of time while enjoying life insurance coverage and benefits for a much longer period of time. Your insurance policy may cover you for 25 or 30 years, but you will pay premiums only for 10 or 15 years.
The benefit is that you can complete your financial obligations during your peak earning years. Suitable for self-employed professionals, freelancers, and individuals with variable income streams.
Moneyback endowment policy

The policy combines savings, insurance, and periodic liquidity. During the policy term, it pays a certain percentage of the sum assured as "survival benefits" at regular intervals, similar to an endowment plan. At maturity, the remaining sum assured, along with any accrued bonuses, is paid. It ensures regular cash flow to meet short-term or recurring financial goals. The plan is ideal for individuals who need recurring funds for recurring milestones, such as school fees, loan EMIs, or vacations.

Who should buy an endowment plan?

Endowment plans can be a great way to create an alternative source of income. An endowment plan provides flexibility in terms of the policy term, the premium payment terms, modes, and frequencies, while also allowing you to choose how much you would like to save. This tends to make an endowment life insurance policy a feasible option.

An endowment life insurance policy pays out the benefits of the policy as a lump sum amount on maturity. Therefore, people who intend to fulfill their financial objectives in the future with the help of a lump sum benefit can benefit from endowment plans.

These plans offer a disciplined way to approach your savings, which makes it easier for you to plan your funds for the future. With a range of premium payment terms and modes, you can choose the number of years for which you want to pay the premiums.

Below are three categories of people who can opt for endowment life insurance.

Those with major future goals

A future investment or the fulfilment of a major financial goal means you have to be ready with the right amount of funds. An endowment plan provides a benefit as a lump sum so that you can plan for an expensive vacation, a large business investment or a big purchase for the future.
Those who seek savings and insurance

The life insurance component in an endowment plan is important for those who do not want to compromise their family’s security due to an unforeseen event. The life cover can help such people save their capital while not having to worry about the financial future of their loved ones.
Those with flexible financial plans

Many people prefer planning their investments over time. Hence, instead of opting for regular income, they choose an endowment benefit that provides a lump sum, allowing them to decide how they wish to invest it, spend it or save it, as per their convenience.

Documents required for an endowment plan
When you want to buy an endowment life insurance policy, these are the following documents you might need:
Valid Address Proof	Valid ID Proof
• Passport • Voters ID card • Driving License • Job Card issued by NREGA duly signed by an officer of the State Government • Masked Aadhar Card • Letter issued by UIDAI	• Passport • Voters ID Card • Driving License • Job Card issued by NREGA duly signed by an officer of the State Government • Masked Aadhar Card • Letter issued by UIDAI

Things to consider before buying an endowment life insurance policy

Before buying an endowment policy, consider the following:

Assess your financial needs

The endowment policy you choose must be aligned with your financial goals.
Understand the features and plan type

Make sure you understand the various types of endowment policies and their benefits before making a decision. For more information about an insurer's plan or to understand how it addresses your needs, visit their website and read their product brochure.
Evaluate the premium and returns:

Check the payment terms and affordability of the premiums to make sure they are within your budget. By using the online endowment plan calculator, you can estimate the return needed for achieving your goals.
Consider tax benefits:

When planning your financial future, it's important to consider the tax³benefits of Section 80C and Section 10(10D).

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What to expect when your Endowment Policy matures?

When an endowment plan matures, you typically receive the sum assured along with any applicable bonuses. This lump sum payment indicates the maturity of your endowment plan and can support future financial needs, such as education or retirement. Understanding the maturity benefits is important when selecting a new endowment policy or reviewing an existing one.

Are endowment plans tax-free³?

An endowment insurance policy can have tax advantages³ according to the prevailing tax rules. As per Section 80C of the Income Tax Act, you can claim a ³tax deduction for premiums paid on an endowment insurance policy, up to the allowed limit.

Additionally, the maturity amount of an endowment policy can be exempted under Section 10(10D), provided the specified conditions are met. This is subject to the policy conditions, like the premium to the sum assured and completion of the lock-in period. You should look into whether the policy you choose has such exemptions. Tax rules keep changing, and thus, you must review them while selecting an endowment insurance policy.

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FAQs About Endowment Life Insurance

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What is an endowment plan?

An endowment plan is a life insurance policy that combines savings with protection. It offers life cover and a lump sum payout at maturity.
Can I customise an endowment plan as per my needs?

Yes, you can customise the plan by choosing the policy term, maturity benefit amount and plan option. This helps align the plan with your specific goals.
What does an endowment plan do?

The endowment plan provides financial protection to your family in case of your death during the policy term. It also helps you save systematically for future financial needs.
When is the best time to opt for an endowment life insurance plan?

You can opt for an endowment plan once you've determined your future financial goals. Many people start in their 20s or 30s for a longer coverage period.
Is it possible to surrender an endowment plan?

Yes, you can surrender your endowment plan after paying premiums for the first two years under limited or regular pay. However, keeping the plan until maturity is generally recommended for full benefits.
Is a lump-sum payout included in an endowment plan?

Yes, an endowment policy typically pays a lump sum at maturity. This sum comprises the amount assured and any bonuses, depending on the policy terms.
What are the key differences between a whole life policy and an endowment policy?

A whole life policy offers coverage for the entire life of the insured, while an endowment policy offers coverage for a specified term and pays a substantial amount when this term is over.

Does the Tata AIA Life Insurance endowment plan have any additional features?

Yes. With the Tata AIA Guaranteed Return Insurance plan, you have the flexibility to cover your spouse in the same policy under the Whole Life Income Option.
Are there tax benefits for all endowment plans?

Yes, premiums may qualify for tax deductions³ under Section 80C, and payouts can be tax-exempt under Section 10(10D), subject to policy terms.
Does an endowment policy also offer life insurance coverage?

Yes, life insurance endowment plans offer life insurance coverage so that you can protect your family’s needs while accumulating lump sum savings for your future commitments.

How do I pay affordable premiums for my endowment plan?

You can compare plans to choose one that aligns with your needs. Selecting appropriate coverage, policy term, and payment term may help keep premiums affordable.
How to pay the premiums under an endowment policy?

You can pay the premiums on an annual, semi-annual, and monthly basis as per the plan option.

What type of claims can be filed on an endowment plan?

In case of the policyholder’s death, their nominee can file a death claim on the endowment policy. On the other hand, if the policyholder outlives the policy term, then they are entitled to a maturity benefit and will have to file a maturity claim.
Can a claim be processed if the nominee is not in India?

Yes, for online claims, the nominee can upload attested documents or email them. For offline claims, documents must be couriered to a representative in India who can submit them at an office.
How can my nominee file an online or offline claim for an endowment plan?
As a nominee, you can file a claim after the policyholder’s death and contact us through any of the given channels:
- Email us at: customercare@tataaia.com
- Call our helpline number - 1860-266-9966 (local charges apply)
- Walk into any of the Tata AIA Life Insurance Company branch offices
- Write directly to us at:
The Claims Department,
Tata AIA Life Insurance Company Limited
B- Wing, 9th Floor,
I-Think Techno Campus,
Behind TCS, Pokhran Road No.2,
Close to Eastern Express Highway,
Thane (West) 400 607.
IRDA Regn. No. 110
What documents are needed to file a claim?

Please click here to know the list of documents needed for the claim intimation and settlement process.
What are the guaranteed return components in an endowment policy?

The guaranteed² components in an endowment policy include the sum assured, along with any accrued bonuses as specified in the policy.
Can I take a loan against my endowment policy?

Yes, policyholders can take a loan using the surrender value of their endowment plan.
How are premiums calculated for an endowment policy?

Premiums are based on your age, policy term, and sum assured. Payment mode and health condition may also affect the amount.
What are the extra bonuses provided in an endowment policy?

Extra bonuses may include reversionary bonuses or terminal bonuses added to the maturity payout.
How can I decide whether to get an endowment policy?

You can evaluate your need for disciplined savings, life cover, and financial goals before choosing an endowment policy.
Can the beneficiary of my endowment policy be changed?

Yes, you can update or change the beneficiary during the policy term, you need to submit a written request and necessary documents to the insurer
Is the maturity amount from an endowment plan tax-free?

Yes, it is generally tax exempt³ under Section 10(10D). This is subject to applicable conditions under the Income Tax Act.
How endowment plan is different from the Term insurance plan?

Term insurance only provides life cover, while endowment plans combine insurance with savings and maturity benefits.
What are guaranteed in endowment plans and what are not?

The sum assured is guaranteed², while bonuses and extra benefits are not guaranteed and may vary.
What are the additional bonuses on endowment policy?

Additional bonuses are declared by the insurer based on profits. They are added to the maturity benefit over the policy term.
Do endowment policies provide a payout in the event of the policyholder’s death?

Yes, the nominee receives a death benefit if the policyholder dies before maturity. This helps ensure financial security for the family.

Endowment Policy

What is an Endowment Policy?

Our Best-Selling Endowment Plan

Guaranteed Return Insurance Plan

Fortune Guarantee Plus

How does an endowment policy work?

Selection of policy & coverage amount

Payment frequency

Customization for goal

Maturity benefit payout

Death benefit

Tax benefits

Features of an Endowment Plan

Dual Benefits

Guaranteed Returns

Maturity benefit

Bonus additions

Flexibility

Loan facility

Benefits of an endowment policy

Long-term savings

Tax benefits

Financial protection

Secures long-term goals

Guaranteed returns

Why should you buy an endowment policy?

Regular savings:

Maturity benefits:

Life insurance:

Lower risks:

Tax benefits:

Goal-based saving:

Flexibility and customisation:

Types of endowment life insurance plans

Unit linked endowment plan (ULEP)

Endowment with full profits

Low-cost endowment

Non-profit endowment

Guaranteed policy

Limited premium payment endowment policy

Moneyback endowment policy

Who should buy an endowment plan?

Those with major future goals

Those who seek savings and insurance

Those with flexible financial plans

Documents required for an endowment plan

Things to consider before buying an endowment life insurance policy

Assess your financial needs

Understand the features and plan type

Evaluate the premium and returns:

Consider tax benefits:

Use Our Online Calculator to Calculate the Premium Amount

What to expect when your Endowment Policy matures?

Are endowment plans tax-free3?

Need advice on a new plan?

Need advice on a new plan?

People Like You Also Read

FAQs About Endowment Life Insurance

What is an endowment plan?

Can I customise an endowment plan as per my needs?

What does an endowment plan do?

When is the best time to opt for an endowment life insurance plan?

Is it possible to surrender an endowment plan?

Is a lump-sum payout included in an endowment plan?

What are the key differences between a whole life policy and an endowment policy?

Does the Tata AIA Life Insurance endowment plan have any additional features?

Are there tax benefits for all endowment plans?

Does an endowment policy also offer life insurance coverage?

How do I pay affordable premiums for my endowment plan?

How to pay the premiums under an endowment policy?

What type of claims can be filed on an endowment plan?

Can a claim be processed if the nominee is not in India?

How can my nominee file an online or offline claim for an endowment plan?

What documents are needed to file a claim?

What are the guaranteed return components in an endowment policy?

Can I take a loan against my endowment policy?

How are premiums calculated for an endowment policy?

What are the extra bonuses provided in an endowment policy?

How can I decide whether to get an endowment policy?

Can the beneficiary of my endowment policy be changed?

Are endowment plans tax-free³?