What are the eligibility criteria to purchase a ₹50 lakh term plan?

The eligibility criteria to purchase a ₹50 lakh term plan typically include the policyholder's age (usually between 18 to 65 years), income, and health condition.

What is the premium amount for a term plan offering coverage of ₹50 lakhs?

The premium amount for a term plan offering coverage of ₹50 lakhs varies based on the policyholder's age, health, lifestyle, and policy term.

What happens if I survive the policy tenure?

If you survive the policy tenure, there is no payout, as term plans do not offer maturity benefits.

What riders can be applied to a ₹50 lakh term insurance policy?

Riders applicable to a ₹50 lakh term insurance policy include critical illness rider, accidental death benefit rider, and waiver of premium rider.

Are tax benefits applicable to ₹50 lakh term insurance plans?

Yes, tax benefits are applicable to ₹50 lakh term insurance plans under Section 80C and Section 10(10D) of the Income Tax Act.

Can I purchase two term insurance plans for higher coverage?

Yes, you can purchase multiple term insurance plans for higher coverage. Ensure that the total coverage amount aligns with your financial needs and insurer's guidelines.

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Endowment Policy

Don’t let the little worries about your future and that of your loved ones turn into mountains of stress. You can build a secure future today with the range of endowment plans from IndiaFirst Life. Our plans offer a life cover alongside low-risk maturity benefits, so you may focus more on the precious moments today and worry less about the uncertainties of the future

Financial Security for Life
Disciplined Long‑Term Savings
Protection for Loved Ones
Assured Maturity Benefits
Insurance with Savings Benefits
Low‑Risk Wealth Growth

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What is an Endowment Policy?

An endowment plan is a life insurance policy combining the benefits of life coverage with long-term savings. It allows policyholders to build wealth over time while safeguarding their families’ future. The plans function as a hybrid of insurance and investment, guaranteeing a payout at maturity or to the nominee in the event of the policyholder’s passing. Endowment policies offer steady returns. They are ideal for people looking to accumulate funds for future goals, such as retirement or a child’s education, while simultaneously enjoying the security of life coverage and tax benefits.

Benefits of an Endowment Policy

Endowment policies come with a range of benefits:

Financial Security

By combining life insurance and savings, endowment plans offer dual protection, ensuring your family is financially secure even in unforeseen circumstances.

Life Cover

Endowment plans provide a death benefit, offering security to your loved ones should anything happen to the insured. This is essential for families relying on the policyholder’s income.

Tax Benefits

Policyholders enjoy tax benefits on premium payments and maturity payouts under Section 80C and Section 10(10D) of the Income Tax Act, enhancing the policy’s financial value.

Dual Benefit

Endowment policies serve as a savings instrument and life insurance plan. This duality means you are accumulating wealth while maintaining financial protection.

Maturity Benefits

Upon policy maturity, the policyholder receives a lump sum payment, including any accrued bonuses. This amount can be used for various goals, such as purchasing property or funding a child’s education.

Rider Benefits

Riders such as accidental death, critical illness, and disability cover, are available, allowing policyholders to customise their protection.

Death Benefits

In the event of the insured’s death, the policy ensures the nominee receives a lump sum death benefit.

Critical Illness Cover

Endowment policies often allow an add-on for critical illness coverage, providing financial support in medical emergencies.

Disability Cover

Disability coverage ensures financial stability if the policyholder faces disability, making endowment policies an all-inclusive financial solution.

What are the Features of an Endowment Insurance Policy?

The best endowment plans come with key features catering to a variety of financial needs:

Flexible Premium Payment Options

Premiums can be paid monthly, quarterly, half-yearly, or yearly, offering flexibility to policyholders in line with their financial capacity.

Loan Facility

Policyholders can borrow against the cash value of their endowment policy, providing liquidity during emergencies.

Rider Options

Endowment policies offer optional riders, such as accidental death benefit or critical illness cover, to enhance the policy’s utility.

Guaranteed Returns

Endowment policies typically guarantee a maturity benefit, providing stable, predictable returns that make them a popular choice for conservative investors.

Tax-Savings

Premiums and payouts are eligible for tax deductions, maximising tax efficiency and enhancing overall savings.

Insurance Coverage

The policy includes life insurance coverage, ensuring a safety net for the policyholder’s family in case of unexpected events.

Stable Growth

Endowment policies offer stable financial growth, making them suitable for risk-averse individuals aiming for reliable returns.

Explore IndiaFirst Life Insurance Plans Tailored for You!

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IndiaFirst Life Guarantee of Life Dreams Plan

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Benefits of long-term Savings.
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How Does an Endowment Policy Work?

Endowment policies are structured to balance risk and reward, functioning as both an insurance and a savings tool.

When you buy an endowment policy plan, you commit to paying regular premiums for a predetermined period, which accumulates into a lump sum payable at the policy’s maturity.
The premiums paid are divided into two portions: one for the life insurance cover and the other invested by the endowment insurance company, often generating annual bonuses.
The investment component grows steadily over time, making endowment plans particularly appealing for conservative investors preferring predictable growth.
If the policyholder survives the policy term, they receive a maturity benefit consisting of the sum assured plus any applicable bonuses.
In the event of the policyholder’s untimely death, the nominee receives a death benefit, typically equal to the sum assured, providing essential financial support.
Some endowment plans offer features such as loans against the policy and optional riders that enhance coverage.

Endowment life insurances are a safe investment choice, particularly for those who prioritise financial security, stable returns, and achieving long-term financial goals, without exposure to high market risks.

Types of Endowment Plans

There are several types of endowment plans to suit different financial goals:

Unit-Linked Endowment Plan

Unit-linked endowment plans link life insurance with investment options. Premiums are allocated toward equity or debt funds based on the policyholder’s preferences, offering potential for higher returns. The returns vary with market performance, making these policies suitable for individuals who can tolerate moderate risk while seeking greater growth.

Low-Cost Endowment Plan

A low-cost endowment plan is designed for individuals saving towards a specific financial goal, such as a mortgage repayment. These plans offer lower premiums, making them affordable while enabling steady accumulation of funds over time. They are aimed at meeting future financial commitments, so are particularly popular among young families planning for future needs.

Full Profit Endowment

In full profit endowment plans, the policyholder receives a guaranteed sum assured along with periodic bonuses, depending on the company’s profits. The policyholder can enjoy growth over time, making it a reliable plan for those aiming for both security and modest wealth creation without needing high returns.

Non-Profit Endowment

These plans focus on providing a guaranteed payout at maturity with no additional bonuses. They are suited for those who prioritise assured returns without the influence of market fluctuations, making them a safer option for risk-averse investors.

Guaranteed Policy

Guaranteed endowment policies ensure a predetermined payout upon policy maturity, independent of market conditions. For individuals seeking absolute certainty, these policies offer reassurance, making them a preferred option among conservative investors.

Who Should Buy an Endowment Policy?

Ideal for individuals seeking a balance between life insurance and investment

Suitable for long‑term goals like buying a home, higher education, or retirement planning.

Appeals to conservative investors preferring low risk and assured returns.

Beneficial for families dependent on the policyholder’s income.

Offers life cover along with disciplined savings leading to a lump‑sum payout at maturity

Advantageous for individuals looking for tax‑saving opportunities under applicable tax laws.

Why Should You Buy an Endowment Policy?

Purchasing an endowment policy offers dual advantages of savings and life protection, which can serve as a reliable financial planning tool. These policies work well for conservative investors who value secure returns with minimal risk. The tax benefits add an extra layer of appeal, making endowment plans a prudent choice for those seeking tax-efficient wealth growth.

Endowment policies offer maturity and death benefits. This provides significant financial security and helps policyholders achieve various life goals with peace of mind. Given the option of adding riders, policyholders can further customise their plan to meet unique needs and circumstances.

What Should You Look for Before Investing in an Endowment Policy?

When considering an endowment policy, evaluate the following factors:

Financial Goals

Define your financial goals, such as saving for a child’s education or building a retirement fund and choose an endowment plan aligning with these objectives.

Plan Features

Review each plan’s benefits, bonuses, and optional riders, ensuring they suit your needs.

Importance of Stability

Endowment plans offer guaranteed payouts, so consider how their stable returns align with your financial risk tolerance.

Types of Plans

Choose the endowment plan type best suiting your investment goals, from unit-linked options to low-cost or guaranteed policies.

Payment Flexibility

Select a premium payment frequency that matches your financial capacity.

Growth Expectations

Compare expected returns and growth potential across different endowment plans to maximise your financial benefits.

Documents Required for an Endowment Policy

There are different ways to set up an STP fund transfer, depending on the investor’s preference and financial goals. Understanding these options can help you choose the best systematic transfer plan for your needs.

Application

You’ll need identity proof, such as

Aadhaar card
Passport

You will also need to submit address proof, such as

Utility bill
Passport-sized photographs

These help confirm who you are and where you reside before the policy is issued. Basic KYC documents are standard across most life insurance applications.

Maturity Claim

To claim the maturity benefit at the end of the policy term, you’ll need to submit

Original policy document
Filled claim form
Identification.

Some insurers may also ask for bank account details so that the payout can be transferred smoothly.

Death Benefit

In case of the policyholder’s death, nominees should provide

Death certificate issued by the government or local authority
Original policy document
Identity proof for claiming death benefit
Duly completed death claim form is also required.

Note: Insurance providers reserve the right to request additional documents or attestations as needed during claim processing.

Eligibility Criteria for Buying an Endowment Plan

To purchase an endowment plan, you must meet certain eligibility criteria:

Age

Typically, policyholders should be between 18 and 65 years.

Health Check-Up

Certain plans require medical tests, particularly for higher sums assured.

Income Proof

Proof of income may be required to establish your ability to pay premiums.

Identification Documents

Valid ID and address proofs, such as an Aadhaar card or passport, are necessary for verification.

Meeting these criteria is essential for securing an endowment policy, ensuring you qualify for the plan best aligning with your financial and protection goals.

What is the Claim Process for an Endowment Policy?

The claim process for an endowment policy varies based on the type of claim:

Maturity Claim

Upon policy maturity, submit the original policy document, a filled claim form, and identification proof.

Death Claim

In case of the policyholder’s death, nominees need to provide the death certificate, claim form, policy document, and proof of relationship.

Accident or Rider Benefit Claim

If the policyholder claims accident or rider benefits, additional documents, such as hospital records, accident reports, or medical certificates, may be required.

The insurer then verifies the claim details, processes it, and typically releases the funds within a few weeks. This stepwise approach to claims ensures beneficiaries receive timely and adequate financial support during critical times.

Endowment Policy Maturity

Upon maturity of an endowment policy, the policyholder receives the maturity benefit. It includes the sum assured and any bonuses accrued during the policy term. This amount is disbursed as a lump sum and can be used to meet long-term financial goals, such as purchasing a home or funding education. If the policyholder passes away before maturity, the death benefit is paid to the nominee, ensuring family protection. The maturity process is straightforward, and the payout is generally tax-free under Section 10(10D) of the Income Tax Act. This makes it a financially advantageous aspect of the plan. An investment calculator may help you do these calculations easily.

Endowment Plans vs Money-back Plans

	Endowment plans	Money-back plans
Objective	Savings + life cover, with the benefit mostly coming as a single payout at the end of the term.	Savings + life cover but designed to give scheduled payouts during the term (survival benefits), along with a final payout at maturity.
Liquidity during policy term	Lower, because the structure is geared toward building a corpus till maturity.	Higher, because periodic survival benefits create planned cash flow during the term.
Flexibility	Feels more “locked-in” because value is concentrated at maturity.	Feels more flexible because cash is returned in parts on a schedule.
Surrender value expectation	Depends on premiums paid and bonus accrual, as per insurer rules.	Often relatively lower when compared to endowment, since a part of the benefits are already paid out earlier (on the basis of a plan’s rules).
Death benefit	The nominee typically receives the full sum assured (and any declared bonuses as per plan rules), even if you’ve lived through the term so far.	The mnominee typically receives the full sum assured even if some survival benefits were already paid earlier.
Maturity benefit	You usually receive the sum assured and bonuses as a lump sum at maturity.	Since some payouts happen earlier, maturity payout is typically the balance amount (after adjusting survival benefits) along with bonuses as per plan rules.
Payout pattern	One main payout at maturity (or death claim if death happens during the term).	Multiple partial payouts at set intervals and remaining payout at maturity.
Bonus treatment	Bonuses (where applicable) generally build up toward the final payout and/or death claim.	Bonuses are typically linked to maturity/death benefit structure, while survival benefits are usually predefined percentages, depending on plan rules.
Best suited for	People targeting a single long-term goal corpus, like a future milestone where a lump sum helps.	People who want regular cash inflow for recurring needs while keeping life cover active.

Tax Benefits of Endowment Plans

Endowment plans offer tax benefits on both premium payments and payouts, making them a tax-efficient investment. Under Section 80C of the Income Tax Act, policyholders can claim deductions on premiums paid, reducing taxable income up to INR 1.5 lakh annually. The maturity benefits, including the sum assured and bonuses, are typically tax-free under Section 10(10D), provided conditions such as minimum premium and sum assured ratios are met. For policyholders aiming to optimise tax savings while securing future financial goals, endowment plans provide a valuable solution - they allow for tax savings during both the policy term and at maturity. An investment calculator may help you do these calculations easily.

IndiaFirst Life Endowment Plans

Plan Name	Key Features	Minimum Premium
Guarantee of Life Dreams Plan	Choice of 3 income Options Up to 5% Extra Income on Online Purchase Enhanced Income Benefit for Women Option to choose the date to receive a regular income.	Yearly: INR 48,000 Half Yearly: INR 24,571 Quarterly: INR 12,432 Monthly: INR 4,176
Guaranteed Single Premium Plan	Guaranteed 7x returns on investment One-time payment (Single Pay) Life Cover that is 1.25 times higher	INR 1,00,000
Mahajeevan Plus Plan	Life cover of up to 15 or 20 years Periodic Cash backs Uninterrupted Life Cover Money Back Discounts with Early Premium Payments	Yearly: INR 12,000 Half-yearly: INR 6,143 Quarterly: INR 3,108 Monthly: INR 1,044
Guaranteed Income Plan	Short-Term Payments, Long-Term Gains Guaranteed Income to fulfil Financial Goals Lifetime Income Till 99 years of age Premium Payback Assurance Continuous Life Cover without any interruptions	Yearly: INR 48,000 Half-yearly: INR 24,571 Quarterly: INR 12,432 Monthly: INR 4,176

Limitations of an Endowment Plan

Endowment plans, while secure, come with certain limitations:

Lower Returns

Compared to mutual funds or other market-linked investments, endowment plans often yield lower returns, making them less attractive for high-growth seekers.

Rigid Structure

Endowment plans are generally long-term commitments, with limited flexibility for mid-term withdrawals or changes.

Higher Premiums

Premiums for endowment policies can be significantly higher than term insurance, as they combine insurance with an investment component.

Early Exit Penalties

Surrendering an endowment plan early may result in penalties, and the payout may be lower than expected, impacting long-term savings goals.

FAQs

View All FAQ

Understanding Endowment Plans

Managing Endowment Plans

What is the purpose of an endowment plan?

Answer: Endowment plans aim to secure long-term savings and offer financial protection. They provide a balance of insurance and investment, helping individuals accumulate wealth over time. By offering a lump sum at maturity or in case of the policyholder’s death, these plans ensure financial security for policyholders and beneficiaries.

What is the difference between a ULIP and an endowment plan?

Answer: ULIP (Unit Linked Insurance Plans) invest in market-linked funds, offering high growth potential but greater risk. Endowment plans, however, provide guaranteed returns with low risk, making them ideal for conservative investors focused on savings and insurance.

What are the disadvantages of an endowment policy?

Answer: Endowment policies tend to have higher premiums and lower returns when compared to equity investments, and limited flexibility. These plans are also challenging to exit mid-term, often resulting in surrender penalties. For investors seeking high returns or flexibility, an endowment policy may not be the best fit.

When is the right time to buy an endowment plan?

Answer: Ideally, purchasing an endowment plan early in life provides more time for wealth accumulation and offers cost-effective premiums. Early investment in endowment policies enables long-term savings growth, supporting future goals such as children’s education or retirement.

What is an Endowment Fund

Answer: An endowment fund, in the context of individual life insurance, is a policy that combines insurance protection with savings. It provides a life cover for a fixed period and also helps the policyholder build a corpus over time.
If the policyholder survives the policy term, the maturity amount is paid out. If the policyholder passes away during the term, the nominee receives the sum assured along with any applicable bonuses.

Can I change my beneficiary for an endowment policy?

Answer: Yes, most endowment plan insurance providers allow policyholders to update or change their nominee during the policy term. To do this, contact your insurer, complete a nominee change form, and provide updated details to ensure accurate records.

Can I withdraw my endowment policy?

Answer: Yes, policyholders can surrender their endowment policy; however, this may incur penalties, particularly if done within the initial years. The payout in such cases may be lower than the total premiums paid, impacting the investment’s profitability.

Can I discontinue my endowment policy?

Answer: Yes, an endowment policy can be discontinued or surrendered. However, penalties often apply, especially if surrendered within the first few years. Discontinuing can lead to financial losses, as the surrender value may be lower than the premiums paid.