Just to give you an example, if you pay an annual premium of Rs 20,000 annually under an endowment plan, you can get a sum assured of around Rs.16 lakh for a 30 year period. It is advisable to go for a pure insurance plan in case the primary need is to avail protection. Maximum Sum Assured. But in case of an endowment plan, you will receive the entire corpus that you have built over time, once the policy tenure is over. 18 - 30 years. The Endowment Plan is for those investors who want to have long term plans. A term plan offers comprehensive life coverage at very low premium rates. This plan has higher premiums but it also pays you a handsome assured amount at the completion of the policy term. this means that in case the policy holder dies during the cover period he is likely to get a huge amount as sum insured as compared to an endowment policy, which would provide very less coverage. It is more suitable for those with less financial setbacks. Please re-enter your phone number. Hence, child plans and pension plans come under the umbrella of endowment plans. The premium of endowment policies is much higher compared to that of term insurance plans. 1 crore, a 30 year old non-smoker man needs to pay Rs. Leaving so soon? Lowest Premium : The premium for a term policy which gives a cover of Rs.1 Crore is almost the price of a cup of coffee. Have you ever come across a situation where you have taken a walk along a hilly … However, some of the riders that both term plans and endowment plans offer include critical illness rider, accidental death benefit rider, hospital cash rider, premium waiver rider and so on. You will receive a call shortly from our customer support. The maturity benefit received under an endowment plan can be used by the policyholder to fulfil different financial needs in his/her life. Term plan offers no such long-term saving options. Term insurance plans provide neither liquidity nor the opportunity of such long-term savings for future. 822–20. Term insurance is a financial protection tool that offers protection cover for a specific number of years. The need for insurance should not be mixed with the goal to invest and grow your money. Endowment insurance plans provide protection along with an investment opportunity. The limitations of an endowment policy are listed as follows: Since a portion of the premium is set aside for investment, the cost of an endowment plan is typically much higher than that of a term insurance plan. If you are interested in availing a life insurance policy, it is best that you know the difference between a term insurance policy and a endowment policy. Benefit 1: From an income replacement perspective, term plan is helpful for the family to recover from the financial catastrophe arises due to the untimely death of an earning member. For the same sum assured, the premium charged by term insurance plans is much less than the endowment plans. Term Insurance Endowment Policy; Covers uncertainties of life: Combines insurance + investment: An absolute must financial tool for everyone: An investment tool for customers who wish to grow their money while availing protection too: Death benefit sum … In other words, if there is an emergency, you are allowed to withdraw money (up to a certain limit) from the corpus of your endowment policy. The endowment life insurance policy promises a risk-free, guaranteed return on a guaranteed date as long as you make the fixed monthly payments. A term insurance policy only provides a death benefit. But, one thing should be kept in mind that, if money is withdrawn, the corpus will reduce resulting in lower returns on maturity. As there is no savings component in term policy the premium would be very less when compared to endowment policy. For instance, for a cover of Rs. Endowment plans are only beneficial for those who are looking at long-term savings, while term policies provide higher coverage and focus only on the insurance component. Similarly, for those who already have a term insurance plan in place and are looking for investment avenues, endowment plan could be a good option. Uh-oh! In a nutshell, a term plan is more affordable than an endowment plan. Both term plans and endowment plans offer a number of rider options. Copyright © 2015 Living Media India Limited.For reprint rights: Syndications Today. It is because a traditional term insurance policy does not offer any returns or bonuses on maturity. So, the sum assured offered by a term plan will sustain your family financially, for a long period of time, after your untimely demise. Benefits of Term Insurance Policy. The beneficiary for ownership has no right to the policy until the death of the policyholder. Ex: Age-25 years, Term 20years. ; Benefit 2: Relatively cheaper pricing compared to savings cum protection type of endowment plans. This benefit is paid at the end of the policy period, Sum assured as death benefit is mostly 20 times the annual income of the policyholder, Sum assured as maturity benefit is not great but sufficient to be used as good investment option, Only death benefit is offered by term insurance, Death and maturity benefit both are associated with endowment plans. Various financial tools in the market take care of this aspect by offering investment and saving avenues to customers so that even in the face of adverse events, financial adversity does not become a challenge. But, if the life coverage amount does not matter much to you, and all you want is to save for future, you may opt for an endowment plan, but then keep in mind you have other financial instruments also at disposal in that case. This content is best experienced in portrait mode. Request received - loud & clear!Returning you to where you were... (You can save searches, track your apps & save plenty of time!). This Page is BLOCKED as it is using Iframes. For the same amount of coverage, an endowment plan will charge higher and if you add riders with your basic plan, the premiums will increase. With policy terms ranging from six to 12 years, mid-term endowment plans require a longer commitment than short-term endowment plans. A pure risk cover instrument for uncertainties of life, A combination product of both insurance plus investment, An absolute must financial tool for everyone, An investment tool for customers who wish to grow their money while availing protection too, A necessary offering for those who have dependents, A product that can be chosen as per preference of customer, No maturity benefit is associated with term insurance plans, Maturity benefit is associated with endowment policy. Choose what suits your financial needs at the end of the day once you know the difference. 1 Cr. The last day of the policy's term is known as the maturity date. The term can be any number of years chosen by the policyholder but most policies have terms of 10, 15, 20 or 25 years. An endowment policy, unlike term insurance is an insurance cum investment instrument that offers both protection in times of crisis and simultaneous growth of money invested. They offer just the death benefits. Display of such IP along with the related product information does not imply BankBazaar's partnership with the owner of the Intellectual Property or issuer/manufacturer of such products. Enter your number below. Rs20,0000. There are some riders that are available only with term plans, while some are available only with endowment plans. Non-participating endowment policies have guaranteed maturity values and cash values. The investment aspect of an endowment plan is subject to market risks. During this term, if the policyholder dies, then his family is entitled to receiving a death benefit in terms of a pre-determined lump-sum amount. Since, pure term plans come at really low premiums, buying the same for protection purposes is the best strategy. Firstly, the premium rates offered by term plans are much lower compared to the endowment plans. Endowment insurance is another type of life insurance policy. 20 crore, depending upon your income. On the other hand, the death benefit received from an endowment plan will help your family overcome the immediate financial hardship brought by your premature death, but it may not be enough to sustain your family for a longer period of time. Or term along with an investment opportunity guaranteed return on a guaranteed date as long as you make fixed! As it provides the sum assured of more than Rs 2 crore for same premium. 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