Endowment plans are life insurance policies with dual purpose. An endowment policy can be used by you to build a risk-free savings corpus, while providing financial protection for family in case of an unfortunate event. This simplicity of an endowment plan has over the years made it an attractive savings plan for all.

A good endowment policy provides us with the confidence and the tax-free1 returns to meet emergencies in the future while enabling us to meet our non-negotiable life goals like meeting children’s education expenses, their marriage or living a dignified retired life on our own. In case of death during policy term, your loved ones get the money you chose for them in a hassle-free manner. Thus, an endowment plan acts like a shield of financial protection for you and your family.

What is Endowment Life Insurance Plan?

Endowment plans are all-rounders in the life insurance sector. They provide a financial cover and a vehicle to save & grow wealth. So, if you need a policy that gives you life insurance protection, maturity benefit and tax benefit in one package, buy an endowment plan. Some policies also give guaranteed additions i.e. every year, a set percentage of total premiums paid or Guaranteed Maturity benefit are added to your policy benefits depending on your policy term. 

Why should you buy an Endowment Policy?

There are a lot of reasons to purchase an endowment policy. It can help you build your financial pool with regular savings. The money received at maturity can be used for various short and long term financial goals, such as a child’s education, buying a car, post-retirement goals, and more. It also helps you protect your family financially, in case of an unfortunate event, through the in-built life cover.

Types of endowment life insurance plans 

  • Unit-linked endowment plans - In these plans, a part of your premium goes into a life cover and the remaining is invested in equity funds, debt funds or a mix of both. You can choose to invest in the fund of your choice basis your risk appetite and financial goals

  • Full/with profit endowment plans - Under these plans, the basic sum assured is pre-decided at the start of the policy term. However, the final payout is higher than the sum assured since bonuses get added to this amount basis the performance of the insurer

  • Non-profit endowment plans - These are similar to full endowment plans. The sum assured is pre-fixed. However, there are no bonuses. Instead, guaranteed policy additions are given at the time of maturity along with the maturity benefits

  • Low-cost endowment plans - These plans allow you to save and collect the funds for financial needs that might occur after a specified period of time, such as re-payment of mortgages, loans, and more

Benefits of an Endowment Policy

There are broadly four benefits of an endowment policy.

  • Life insurance benefit - Your loved ones are always taken care of. The life insurance benefit gives a lump sum pay-out, ensuring that even in your unfortunate absence your family members are able to continue the life you so carefully planned for them. This is a fixed amount and is given to your nominee/legal heir. Do remember some policies also give guaranteed additions and Reversionary Bonus which are considered in the calculation of death benefit.

    For instance, a 35-year-old person buying ICICI Pru Savings Suraksha pays ₹ 30,000 annual premium for a sum assured on death# of ₹ 3 lakh. So, they are getting 10 times sum assured for the premium.

  • Maturity benefit - As long as you pay timely premiums and keep the endowment policy active, the maturity benefit is intact. This is a guaranteed maturity benefit amount that will enable you to meet your financial goals. This maturity benefit depends on the policy term, policy premium, premium payment term, age, and gender. You may get guaranteed additions on maturity in some policies. Apart from this, in participatory policies, you may also get Accrued Reversionary bonuses and Terminal bonuses.

  • Tax benefit1 - Endowment insurance plans also offer tax benefits1. The premiums you will pay can help you reduce your taxable income under Section 80C of Income Tax Act1. There are tax benefits available on maturity of endowment policies as well. This helps you save tax at the time of inception of the policy and accumulation stage, and also the maturity stage.

  • Loan benefit - Endowment policies can help you use them to get a loan. After a policy acquires a surrender value you can take a policy loan. The interest charged on such loans is quite competitive. For instance, some ICICI Prudential traditional plans offer a loan amount of up to 80% of the surrender value. The loan benefit helps you arrange funds in emergency and when all other routes of collecting funds are blocked.

  • Option to add riders - Endowment plans offer additional riders to enhance the coverage of the plan. You can add a critical illness rider, an accidental death rider, or a permanent disability rider and enjoy increased protection

  • Low risk - An endowment policy is usually a low-risk investment. Your money grows over time with most endowment products and your returns are guaranteed

  • Dual purpose - You get to enjoy the dual benefit of insurance as well as investment. Your savings continue to build over time and your family stays secure in the case of an unfortunate event

Salient features of an Endowment Policy

Endowment policies offer a whole range of features. Let us go through them, one by one.

  • Guaranteed savings no matter what - An endowment policy gives fixed returns. So, your financial goals and family's future are always in safe hands.

  • Dual Benefits - Endowment policies provide dual benefits of savings and life cover. Plus, the returns are tax-free so real returns are higher.

  • Premium flexibility - Premium payment can be done on monthly, half-yearly, and on yearly basis.

  • Zero risk - Endowment plans come with zero risks for you. As long as you pay premiums on time, all your benefits are safe. There is zero risk.

  • Earn bonus - Endowment plans offer additional bonuses. The bonus is the extra amount of money which a policyholder can get.

  • No market risk - Endowment policies are non-linked. In these policies will not be dependent on

Who should buy an Endowment Policy?

An endowment policy is suitable for anyone from a young professional to a senior citizen. Most of us have family responsibilities that we need to take care of. Also, most of us have long term non-negotiable goals that need to be achieved no matter what.

If you are looking for a low-risk plan with the two-in-one benefit of insurance and investment, go for an endowment policy.

If you are looking for lump sum maturity for long-term goals, an endowment plan is suitable for you.

If you want to save small amounts of money over the long-term and get tax benefits, an endowment policy is best for you.

If you want zero risks in an investment, endowment plan is the one you should consider.

Things to consider before buying an Endowment Policy

The market is flooded with different endowment policies. How do you find the best one? The answer is easy if you know what the things you need to look at are.

  • Affordable premium - The cost of the premium is probably the first thing insurance customers look. Since endowment policies are a long-term financial commitment, an affordable premium is a must. A very big premium amount may lead to a situation when you are forced to stop due to exigencies.

  • Guaranteed addition/bonus - Some Endowment policies offer guaranteed additions (GAs). Guaranteed Additions (GAs) are added to the policy at the end of every policy year if all due premiums have been paid. This addition is paid as a rate of all premiums paid so far. This means you will get continuous rewards for continuing with a policy.

  • Claim settlement ratio and process - You must choose an endowment policy from an insurer who has a high and consistent claim settlement ratio. Additionally, a simple and fast claim process should be preferred. Buy policies from an insurer where claims can be reported online, at branches, central office, SMS or email etc.

  • Financial status of the insurer - Storms can't uproot trees with deep roots. The financial strength of an insurer is vital. Buy endowment policies from an insurer who has an independent certification of financial strength. For instance, ICICI Prudential Life Insurance has been rated iAAA since 2009 by rating agency ICRA. This Claims Paying Ability rating measures an insurance company’s ability to meet policyholder obligations. 

  • Flexible premium payment options - Invest in a plan that allows you to pay premium monthly, quarterly, or annually, so that it suits your income pattern

  • Option to add riders - Riders can provide you with increased benefits. Make sure to look for an insurer that lets you add riders to your policy to enhance the scope of the coverage

  • Plan early - If you buy an endowment life insurance plan early, not only do you get lower premiums with a high sum assured, you can also choose a long policy term and generate a large savings fund over time


No matter what your need is, we have a solution

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A plan that offers regular additional income for celebrating the little joys of life and making all those precious moments, a little extra special. 

  • Addition to your regular income with guaranteed pay-outs
  • Security of your loved ones with wealth creation and Life Cover
  • Premium payment as per your comfort
  • Tax benefits


Offer your savings the opportunity to grow while enjoying the benefits of guaranteed returns.

  • Savings with the comfort of guarantee
  • Premium payment as per your comfort
  • Security of your loved ones with wealth creation and your Life Cover


Protect your loved ones and secure their dreams with guaranteed wealth growth.

  • Growth of wealth with Guaranteed Additions
  • A lump sum pay out to secure your future
  • Premium payment as per your comfort
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1. Do endowment plans offer a life cover?

Yes, endowment plans offer a life cover. This protects your loved ones by providing a lump sum amount in case of an unfortunate event during the policy term. The amount paid to the nominee is generally the higher of the following:

  • The minimum sum assured, decided while buying the plan
  • The sum assured plus all the accrued guaranteed additions and bonuses*
  • The guaranteed amount at maturity plus accrued guaranteed additions and bonuses*

2. Does an endowment plan offer guaranteed returns?

Yes, an endowment plan offers guaranteed returns at the time of maturity, given all the premiums are paid in full. This is called the guaranteed maturity benefit. Endowment plans also offer a life cover that pays out a lump sum to your loved ones in case of an unfortunate event during the policy term.

3. Do I receive an additional bonus along with the guaranteed benefit after the endowment policy matures?

Yes, in addition to the guaranteed maturity benefit, an endowment plan offers benefits in the form of bonuses. These additional bonuses increase the returns you receive from the plan.

4. When is the right time to buy an Endowment Policy?

Although an endowment plan is suitable for all ages, the right time to buy it is as soon as possible. If you have a family to look after and want to secure their future in your absence, an endowment plan can help you. The returns from such plans increase with time and can cover expenses like children’s education, loans repayments, and others.

5. What is the tenure of an Endowment Policy?

The tenure of the policy can be between 15 and 20 years. The minimum age at the time of policy maturity should be 18 years, and the maximum age at the time of policy maturity should be 70 years or less.

6. Who is eligible to invest in an endowment plan?

Anybody looking to save money with a low-risk tool can purchase an endowment plan. Most endowment plans do not have any minimum age criteria and can be bought by anyone. However, some plans may have a minimum age criterion of 1 year. The maximum age limit is set at 60 years for most plans.

7. Can I buy an endowment plan for my child?

Yes, you can purchase an endowment plan for your child. Most endowment plans do not have a minimum age criterion and can be bought by anyone. However, some plans may have a minimum age criterion of 1 year. You can also buy an endowment plan for yourself with your child as the nominee. In this case, your child will be entitled to the maturity benefit along with any additions and bonuses in your absence.

8. How many times can I change the nominee in my endowment plan?

As your life stage changes, you may want to change the nominee for your endowment plan. To accommodate this requirement, endowment plans allow you to change the nominee as many times as you want during the policy term. The last updated nominee becomes the beneficiary at the time of the payout.


9. What happens if you discontinue your Endowment Policy Premiums?

If you have reached the bar for surrender value, you will be given the surrender value if you discontinue the plan. You will receive the guaranteed surrender value and the cash value of the vested bonuses. However, if your policy has not reached the surrender value, you will not receive any benefits.

10. What documents are required to buy an Endowment Policy?

You need to have a photograph, ID proof, address proof and PAN to buy an Endowment Policy.


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ICICI Pru Cash Advantage (UIN: 105N132V02), ICICI Pru Savings Suraksha (UIN:105N135V02), ICICI Pru Assured Savings Insurance Plan (UIN: 105N144V08)

# Death benefit

On death of the life assured during the policy term, for a premium paying or fully paid policy , the following will be payable:

Death Benefit = Highest of,
Sum Assured plus accrued Guaranteed Additions and Bonuses*
GMB plus accrued Guaranteed Additions and Bonuses*
Minimum Death Benefit

*Bonuses consist of vested reversionary bonuses, interim bonus and terminal bonus, if any

Minimum Death Benefit is equal to 105% of sum of premiums paid till date (excluding extra mortality premiums, Goods & Services Tax and Cess (if any). All policy benefits cease on payment of the death benefit.

** Mentioned guaranteed addition is for 25 years male, 10 year premium payment term, 30 year policy term, ₹ 10, 00,000 sum assured and ₹ 1,00,000 annual premium exclusive of taxes.

1. Tax benefits under the policy are subject to conditions under Section 80C, 80D, 10(10D) and other provisions of the Income Tax Act, 1961.Tax laws are subject to amendments made thereto from time to time. Please consult your tax advisor for details, before acting on above.

2. If the policy offers guaranteed returns, then these will be clearly marked “guaranteed” in the Benefit Illustration. Since the policy offers variable returns, the given illustration shows two different rates of assumed future investment returns. The returns shown above are not guaranteed and they are not the upper or lower limits of what you might get back, as the maturity value of policy depends on a number of factors including future investment performance


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