Endowment plans are life insurance policies that not only covers the insured’s life in case of an unfortunate event, but also offer a lump sum amount known as “maturity benefits” at the end of term. ‘Maturity’ here means after a specific period of time. Insurance company pays the assured sum to policy holder or to his nominee/legal heirs either at end of policy period or upon untimely death of the insured before policy period.
This policy is a combination of insurance and investment. This is a risk-free investment as it has a pool of savings after maturity of the policy which can either be reinvested or spend post-retirement. The assured sum can also be utilized for monthly expenses, children’s education or wedding or even for a vacation.