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 life protection. It providesfinancial protection to the policyholders Read more family in case of any unfortunate event, and if the policyholder survives, they receive a lump sum amount including accrued bonuses (if declared).
By choosing an endowment savings plan, policyholders may ensure disciplined savings along with life cover. Buying an endowment policy helps policyholders build long-term financial security.Read Less

An endowment policy is a type of life insurance that combines savings and life.Read more protection. It provides financial protection to the policyholders family in case of any unfortunate event, and if the policyholder survives, they receive a lump sum amount including accrued bonuses (if declared).
By choosing an endowment savings plan, policyholders may ensure disciplined savings along with life cover. Buying an endowment policy helps policyholders build long-term financial security.Read Less

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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

The following are the types of endowment life insurance plans:

Traditional endowment plans

These are traditional life insurance plans that combine the benefits of insurance and savings. Under a traditional endowment plan, the policyholder pays premiums for a certain period, and after the policy matures, the policyholder receives a lump sum payout.
Unit linked endowment plan

These are insurance plans that combine the features of both insurance and investment. A part of the premium amount is invested in equity or debt securities. The policyholder can choose the desired fund, and returns are based on the fund’s performance.
Non-profit endowment plan

Under this type of endowment policy, a maturity amount is paid to you at the end of the policy term, or a lump sum benefit will be paid out to your nominee in the event of your unfortunate demise. These policies are known as non-profit endowments because the life insurance policy does not comprise any additional bonuses. Therefore, the guaranteed2 payout will remain the same as the amount pre-determined at the time of policy purchase.
Low-cost endowment

The premium amount under this type of endowment plan is low, which helps you save your money for future payments. A certain amount is guaranteed2 to be paid out on maturity; in the event of your death, your nominee will receive the same. Moreover, yearly bonuses, as and when declared, will be payable, which boosts the maturity corpus. Hence, these plans can help you accumulate funds within a defined period.
Endowment with full profits

The endowment plan with full profits provides predetermined assured returns, minimising the risk of market fluctuations. The policyholder receives the assured sum on maturity or in case of untimely death, along with additional bonuses declared by the insurer from time to time.
Limited premium payment endowment policy

Under this plan, premiums are paid for a shorter duration while coverage continues for the full term. Premiums are higher due to the shorter payment period; so this may be suitable for individuals who want to pay for a limited time but still want long-term coverage.
Money-back endowment policy

Money-back endowment plan provides periodic payouts during the policy term in addition to the maturity benefit. It helps ensure liquidity for short-term financial needs or emergencies while maintaining life cover throughout the policy period.

Who should buy an endowment plan?

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 fulfil 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

Plan early

You should start your endowment life insurance policy early, so that the lump sum received at maturity aligns well with the timing of your financial goals. By choosing a policy term and premium payment option of your choice, you can align your goals perfectly with your savings.
Compare policies

Since an endowment life insurance policy is quite flexible, you should compare different plan options, policy terms and other benefits to check which endowment plan will be suitable for you. If you have long-term goals, then be sure to choose a policy term that will enable you to accumulate capital over the long term.
Flexible options

To keep premium payments manageable and maintain your other expenses, choose a policy term, premium payment term, and payment mode that allow you to build your savings fund while keeping premiums affordable.

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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

Traditional endowment plans

Unit linked endowment plan

Non-profit endowment plan

Low-cost endowment

Endowment with full profits

Limited premium payment endowment policy

Money-back 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

Plan early

Compare policies

Flexible options

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?

Is the maturity amount from an endowment plan tax-free?

Are endowment plans tax-free³?