Endowment Plan

Dual benefit: An endowment plan provides both insurance coverage and a savings/investment component. If the policyholder survives the term of the policy, the policy matures and the policyholder receives the endowment benefit, which is a lump sum payout. If the policyholder dies during the term of the policy, the designated beneficiaries receive the death benefit, which is typically higher than the total premiums paid.

Maturity period:Endowment plans have a specific maturity period, which is the length of time the policy needs to be in force for the policy to mature and the endowment benefit to be paid out. Maturity periods can vary depending on the policy, ranging from 5 to 30 years or more.

Premiums: Policyholders pay regular premiums for the duration of the policy, which typically include both the insurance coverage cost and the savings/investment component. The premiums paid are used to provide the insurance coverage, cover administrative expenses, and invest in a designated fund or funds to generate returns.

Savings/Investment component: One of the distinguishing features of an endowment plan is the savings/investment component. A portion of the premiums paid is invested by the insurance company in a designated fund or funds, and the policyholder may receive returns in the form of bonuses or dividends, depending on the performance of the investments and the terms of the policy.