Endowment policies: All you need to know about coverage, premium, suitability

1. They are a combination of insurance and investment.

2. These policies cover risk of premature death and pay sum assured to beneficiary or pay maturity benefit to life assured where the assured survives the full policy term.

3. Premiums are higher than pure term insurance.


Also read: How covid-19 will impact insurance choices

4. Suitable for people with a regular stream of income with capability to pay the premium for entire term and who need a lump sum amount after a certain period of time.

5. Suitable for people with low-risk appetite looking for wealth accumulation with guaranteed return and tax benefit.

Also read: Dos and don’ts when buying life insurance cover

(Content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.)