ENDOWMENT ASSURANCE

 Endowment Assurance

An endowment assurance contract is actually a combination of two plans

-      A term assurance plan which pays the full assured in case of death of the insured during the term

-      A pure endowment plan which pays this amount if the insured survives at the end of the term.

The product thus has both a death and a survival benefit component. The contract is a combination of decreasing term insurance and increasing term insurance.

Endowment is primarily a savings program which is protected by provision of insurance against the contingency of premature death. It also offers a safe and compulsory method of savings accumulating, the semi compulsory nature of premiums provides the incentive to save.

People buy endowment plans as a method of providing for old age or to meet specific life purposes. E.g. education fund, marriage expenses. It also helps to pay for a mortgage loan.

Another positive aspect is the policy can be placed in a trust created under the MWPA (Married Women’s Property Act) 1874 and the money can be paid only to the beneficiary.

Many endowment policies mature at age 55-65 when the insured is planning for his / her retirement and such policies may be a useful supplement to other sources of retirement savings.

Read more about endowment plans here: https://www.turtlemint.com/life-insurance/articles/a-complete-guide-to-endowment-policy/