Endowment Policy - Best Endowment Plans in India 2023 | Edelweiss Tokio Life
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Endowment Policy
Here is your true jeevan sathi!
We bring you Endowment Plans that work towards life protection and
bring returns on your investment.
Take a step ahead to secure your retired life
How Does an Endowment Plan Work?
- A rough timeline of an endowment plan is such: after you pay your first premium, your policy commences.
- In case you pass away, the life cover is paid out to your family.
- If you survive during the policy term up to the date of maturity, you receive survival benefit during the policy term and/or, a lump sum amount at maturity.
- This way, you’re protected both in life and death.
With an endowment plan, not only do you create wealth, but you also provide a safety net for your family members in your absence. It helps you fulfil your hopes and dreams for your life, such as buying a home, taking care of your family, planning holidays, and making dreams come true. An endowment insurance plan can help you achieve your goals with complete peace of mind.
Salient Features of an Endowment Policy
These are some of the salient features of an endowment policy:
- Endowment policies come with the dual benefit of savings and life insurance cover.
- Endowment policies policies offer returns, which makes them a reliable choice for policy buyers.
- The total premiums you pay towards an endowment plan are eligible for tax benefits3 under Section 80C of the Indian Income Tax Act, 1961.
- The returns on an endowment plan offer tax benefits3 under Section 10(10D) of the Indian Income Tax Act, 1961.
- The premium payment in an endowment policy can be made on a monthly, quarterly, half-yearly and annual basis.
- Endowment plans are low risk, and you can continue to enjoy the benefits provided all due premiums are paid and the policy is in-force.
Do Endowment Plans Offer Tax-Benefits³?
Enjoy the following tax benefits³ with endowment plans in India:
1. Tax benefits³ for the premium paid: The total premiums you pay towards an endowment plan enjoy tax benefits3 under Section 80C of the Indian Income Tax Act and reduce your total taxable income.
2. Tax Benefits³ on returns on maturity: The maturity payouts of an endowment policy have tax benefits3 under Section 10(10D) of the Income Tax Act.
Who Should Buy Endowment Policy?
An endowment plan is meant for someone who wants to invest and save to fulfil their future financial plans. Since an endowment plan requires a disciplined and regularised approach to savings, those with a steady flow of earnings can consider such a policy. Over the months, regular savings made in an endowment plan also help one understand the importance of savings.
Those who own and run small enterprises, professionals such as doctors and lawyers and salaried individuals can consider choosing endowment plans to meet their long-
term financial goals.
Moreover, anyone seeking the dual benefit of life insurance cover as well as savings can opt for an endowment plan. These plans are designed to build a financial corpus over a period of time (during the policy tenure) and can be a good way to combat future financial contingencies.
What to See When Buying an Endowment Policy?
Endowment Vs Money Back Policy
Here are a couple of difference that separate an endowment plan from a money-back policy:
| Endowment Plans | Money-back Policies |
| If the policyholder survives the maturity of the term, the sum assured, along with any applicable bonuses, is paid out to them. | At regular intervals during the policy, the insured receives a percentage of the sum assured. The rest of the sum assured and any applicable bonuses are paid out on maturity |
| An endowment plan can be a good option for someone seeking to build a saving corpus over the long term to meet future financial goals. | If you need to meet your expenses with a regular flow of income, then a money-back policy is a good option. |
Endowment Vs Term Insurance
These are the following differences between an endowment plan and a term insurance plan:
| Endowments Plans | Term Insurance plans |
| An endowment plan offers the dual benefit of life cover plus savings. | A term insurance plan is a pure protection plan that provides financial aid to the policyholder’s family in an emergency. |
| The premium payment for an endowment plan is high since it covers maturity benefits as well as any applicable bonuses. The premium also covers the savings component of the plan. | Term plans premiums are quite affordable as they are meant to provide life cover and death benefits to the nominees in case of the policyholder’s demise during the policy term. |
| The sum assured of an endowment plan is lower than a term plan because these plans offer maturity benefits. | Since a term insurance plan is only a risk cover, the sum assured is high even when the premiums are low. |
| In an endowment plan, the beneficiaries receive a lump sum payment as a death benefit, or the policyholder receives the same as a maturity benefit. | In a term policy, the sum assured is paid out to the beneficiaries only if the policyholder passes away during the tenure of the policy. |
What Happens When Endowment Policy Matures?
Endowment plans, like all life insurance policies, have a set term. Upon the completion of this term, the endowment policy is considered mature. For example, if you choose an endowment plan with a 15-year term, you will receive the maturity benefits at the end of this term. This means you will receive the payout from the policy. If you are alive when the policy matures, the maturity benefits will be paid directly to you. However, in the event of your untimely death during the policy term, the death benefit listed in the policy will be paid to the beneficiaries named in the policy documents.
Claim Process of Endowment Plan
The claim process is initiated by the beneficiary of the policyholder in case of the latter’s untimely demise:
- Inform the insurer about the incident soon. The claim form is then forwarded to the beneficiary.
- The claim form must be signed by the nominee. It should be accompanied by a statement from the last doctor who has checked the late policyholder. A certificate from the hospital authorities where the policyholder was treated is also necessary. Further, there should be a statement from a witness present at the cremation and a death certificate. If needed, the insurer should get the completed discharge voucher.
- In case of unnatural death, a police investigation report, an FIR, and a copy of the post-mortem is needed.
- If the policyholder was employed, then the employer’s e-certificate is needed.
You might need to submit other document requested by your insurance provider basis your individual case requirements.
List of Documents Required While Purchasing Endowment Plan
These are some essential documents you need to have while buying an endowment plan:
- Proof of Residence
- Duly filled application form
- Photo ID
- Proof of Age
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1 - This is applicable only if all due premiums are paid and the policy is in-force.
3 - As per provisions of Income Tax Act, 1961. Tax benefits are subject to changes in tax laws.
4 - If declared, Cash Bonus is a non-guaranteed bonus which may be payable based on the performance of the participating fund of the Company.
9 - Riders are available at extra cost.
^² - Claim statistics are for Financial Year 2021-22 and is computed basis individual claims settled over total individual claims for the financial year. For details, refer to Public Disclosures in our Website.
^³ - Excellence in CX-2022 has been received at the 3rd Edition of The Economic Times CX Summit. This award has been given to those organisations who have demonstrated excellence in Customer Experience in FY22.
Edelweiss Tokio Life - Accidental Total and Permanent Disability Rider is only an Individual, Non-Linked, Non-Par, Pure Risk Premium, Health Insurance rider. UIN 147B001V03
Edelweiss Tokio Life - Accidental Death Benefit Rider is only the name of an Individual, Non-Linked, Non-Par, Pure Risk Premium, Health Insurance Rider. UIN 147B002V03
Edelweiss Tokio Life - Critical Illness Rider is only the name of the Individual, Non-Linked, Non-Par, Pure Risk Premium, Health Insurance rider. UIN 147B005V03
Edelweiss Tokio Life – Payor Waiver Benefit Rider is only the name of the Individual, Non-Linked, Non-Par, Pure Risk Premium, Life Insurance Rider. UIN 147B014V04
Edelweiss Tokio Life - Waiver of Premium Rider is only the name of the Individual, Non-Linked, Non-Par, Pure Risk Premium, Health Insurance rider. UIN 147B003V04
Edelweiss Tokio Life - Hospital Cash Benefit Rider is only the name of an Individual, Non-Linked, Non-Par, Pure Risk Premium, Health Insurance Rider. UIN 147B006V03
^^ Applicable where the taxable income exceeds Rs. 5 crores. Tax benefit of ₹ 64,116 is calculated at highest tax slab rate of 30% (in addition to income tax, a surcharge of 37% is applicable where the Taxable Income exceeds 5 Crores) on life insurance premium u/s 80C of ₹ 1,50,000. As per provisions of Income Tax Act, 1961. Tax benefits are subject to changes in tax laws.
* Tax benefit of ₹ 46,800 is calculated at highest tax slab rate of 30% (in addition to income tax, cess of 4% is also applicable) on life insurance premium u/s 80C of ₹ 1,50,000. As per provisions of Income Tax Act, 1961. Tax benefits are subject to changes in tax laws.
The Linked Insurance Products do not offer any liquidity during the first five years of the contract. The policyholder will not be able to surrender/withdraw the monies invested in Linked Insurance Products completely or partially till the end of the fifth year.
Unit Linked Life Insurance products are different from the traditional insurance products and are subject to the risk factors. The various funds offered under this contract are the names of the funds and do not in any way indicate the quality of these plans, their future prospects and returns. Please know the associated risks and the applicable charges from your Personal Financial Advisor or the Intermediary or policy document of the Insurer. The premium paid in unit linked life insurance policies are subject to investment risk associated with capital markets and the unit price of the units may go up or down based on the performance of investment fund and factors influencing the capital market and the policyholder is responsible for his/her decisions.
ARN: CP/3108/Feb/2023