Investment Plans 787 views September 16, 2021

An endowment plan is a life insurance scheme with which you can get the dual benefits of insurance and investment. You can let your wealth grow over the policy term with an endowment plan. Other than this, it will also provide financial protection to your family if you die during the policy period. Some of the key features of endowment plans are higher returns, flexible policy & premium payment terms, low-risk investment options, tax benefits, etc. The best part is the various types of endowment plans that you can see below.

  • Low-cost Endowment Plan
  • Full (with profit) Endowment Plan
  • Unit-linked Endowment Plan
  • Guaranteed Endowment Policy
  • Non-profit Endowment Plan
  • Unitized with Profit Endowment Plan

Investment

To know the right investment, please fill the details below and our policy experts will get in touch with you

+91

When choosing the best endowment plan for yourself, you must understand different types of endowment plans. On this page, we will talk about the same so that you can make a better decision. Let’s start without any further delay.

Different Types of Endowment Plans that You Can Choose from

We’ve discussed the features and benefits of different types of endowment plans below. Take a look.

Low-cost Endowment Plan

This type of endowment plan helps policyholders accumulate funds for the future, due after a particular period. So, if you are looking to repay a loan or mortgage after a few years, a low-cost endowment plan could help you in the same. In the case of an insured person’s demise during the policy term, the nominee or beneficiary gets the minimum sum assured. Under this plan, the premium amount is generally lower as compared to other types.

Full Endowment Plan

Also known as With Profit Endowment plans, this type of plan will provide a guaranteed sum assured (right from the start of the policy) to the policyholder in case of any eventuality. However, the final amount received by a policyholder is generally higher than the guaranteed amount as the yearly bonus keeps getting added to the sum assured. The bonuses declared under this endowment plan will be paid to the nominee in the event of the insured person’s death or at the maturity of the policy.

Unit-linked Endowment Plan

Unit-linked endowment plans can suit those individuals who have a high-risk appetite and want to get lucrative returns on their investments. Under this plan, your premium gets invested in different fund options as per your choice to generate higher returns over the policy term. It is a fixed-term insurance scheme that uses your premium amount to invest in the funds of your choice. Do remember that your final return on the investment will depend on the fund’s market performance. Also, you will get life coverage insurance.

Guaranteed Endowment Policy

As the name suggests, a guaranteed endowment policy offers a guaranteed sum of money whether the insured person lives until the maturity of the insurance policy or not. In case of the demise of the insured person, the insurance company will provide the face value of an endowment policy to the nominee or beneficiary. In case the insured person survives until the end of the policy term, he/she will get a face value. However, bonuses under the endowment policy are not guaranteed.

Non-profit Endowment Plan

Clear from its name, this type of endowment plan does not give any profits in the form of bonuses to the policyholder. A non-profit endowment plan provides a fixed lump sum amount to the policyholder on the maturity of the policy or the nominee/beneficiary in case of the demise of the insured person, whichever is earlier. The payout remains fixed as the insurer does not include any bonuses in such a plan.

Unitized with Profit Endowment Plan

This type of endowment plan is a hybrid unit-linked endowment plan that balances the fluctuations of the unit-linked policies. With this fixed-term insurance scheme, a minimum guaranteed payback amount (the annual value of units) is insulated from the market risk. In case the insured person dies, the nominee will get this amount. With no risk, this is considered to be a safe option for customers.

People Also Read