What are the additional bonuses on the endowment policy?

Additional bonuses on endowment policies typically include annual reversionary bonuses and terminal bonuses. These bonuses depend on the insurer's profits and may vary each year. They are added to the maturity benefit or the death benefit, enhancing the overall payout.

How to know whether I should buy an endowment policy?

You should consider buying an endowment policy if you're looking for a long-term savings and insurance solution that provides guaranteed# returns, life cover, and tax benefits*. It is suitable for individuals with long-term financial goals like retirement, children's education, or purchasing a home.

How is an endowment policy taxed?

Premiums paid towards endowment policies are eligible for tax deductions under Section 80C of the Income Tax Act, up to ₹1.5 lakhs per year. The maturity proceeds or death benefits are tax-free under Section 10(10D)**, provided certain conditions are met.

Do endowment policies payout on death?

Yes, endowment policies pay out a death benefit to the nominee in case of the policyholder's demise during the policy term. This amount typically includes the sum assured and any accrued bonuses, providing financial security to the dependents.

Can I receive a bonus along with the assured sum after the policy matures?

Yes, the maturity benefit of an endowment policy usually includes the sum assured and any accrued bonuses, such as annual reversionary bonuses and terminal bonuses.

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Aditya Birla Sun Life Insurance Company Limited

Give ₹1 lakh for 6 years and get Guaranteed^# Returns of ₹14.48 lacs¹.

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Two options for benefit payouts

Tax Benefits*

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Endowment Plan

What is an Endowment Policy?

How Do Endowment Plans Work?

Endowment plans are quite straightforward. When you buy an endowment policy, you agree to pay a regular premium for a fixed term. This premium partly contributes to life cover, ensuring financial protection for your family, and partly accumulates as savings. Over the years, this savings component grows, sometimes with added bonuses, depending on the policy's performance.

At the end of the policy term, you receive a maturity benefit. This amount includes the sum assured along with any bonuses or additional benefits as specified in the policy. In case of your demise during the term, the beneficiary receives the death benefit, which is usually the sum assured plus any accrued bonuses, ensuring your family’s financial needs are taken care of.

Types of Endowment Life Insurance Plans

Endowment life insurance plans come in various types to cater to different financial needs and preferences. Here's a brief overview

Traditional Endowment Plans

These are the simplest form, offering a guaranteed# sum assured plus potential bonuses. They are low-risk and provide stable returns, making them suitable for conservative investors.

Unit-Linked Endowment Plans

These plans combine life insurance with investment in equity and debt funds. The returns depend on market performance, making them ideal for those who are willing to take on more risk for potentially higher returns.

With-Profit and Without-Profit Plans

'With-profit' plans offer bonuses based on the insurer's performance, while 'without-profit' plans do not. The choice depends on whether you want potential additional returns or prefer a straightforward sum assured.

Full Endowment and Low-Cost Endowment

Full endowment plans aim to provide a sum assured that's equal to or greater than the death benefit at maturity, while low-cost endowments are typically used for mortgage repayment and offer lower premiums.

Our Endowment Plans

ABSLI Akshaya Plan

Whole Life Insurance with Cash Bonus.

Flexible Bonus Payouts

Two options for benefit payouts

Life Cover

Tax Benefits^*

Get:

₹14.48 lacs¹

Give:

₹1 lakh for 6 years

Know More

ABSLI Vision MoneyBack Plus Plan

Life Protection with regular income

Guaranteed^# survival benefit

Regular income

Enhanced Savings

Customized pay-outs

Know More

ABSLI Vision LifeSecure Plan

Comprehensive life protection with long-term financial security

Minimum entry age 30 days

Life cover up to age 100

Regular bonus

Enhanced Savings

Know More

ABSLI Income Assured Plan

Guaranteed^# Returns to fulfil future dreams

Receive monthly payouts

Guaranteed^# Additions

Tax Benefit^*

Short premium paying term of 5/7/10 years

Get:

₹8,50,000³

Give:

₹1,49,604/yr

Know More

ABSLI Jeevan Bachat Plan

Guaranteed^# returns and Life cover worth 10 times of annual premium

Guaranteed^# benefit on maturity/death

Guaranteed^# additions till maturity

Inbuilt-accidental death benefit

No medical test

Get:

₹26,120⁵

Give Premium:

₹20,900 for 1 year

Know More

ABSLI Monthly Income Plan

Monthly income benefit for independent retired life

Financial protection

Income for recurring needs

Inbuilt accidental death benefit

Bonus to boost savings

ABSLI Vision LifeIncome Plus Plan

Comprehensive life cover plus guaranteed^# regular income

Whole life cover up to age 100

Guaranteed^# regular income

Cash-in-hand option

Flexible Bonus Payouts

Know More

ABSLI Vision Endowment Plus Plan

Secured savings and financial protection for family

Life Cover

Sum assured on maturity

Tax Benefit^*

Accrued Regular Bonus

Get:

₹3.07 lakhs⁴

Give:

₹31,502 for 7 years

Know More

ABSLI Vision LifeIncome Plan

Savings plan with whole life income

Minimum entry age 30 days

Income after retirement

Whole life cover

Lump-sum payout

Get:

₹50.30 lakhs @4% and ₹87.04 lakhs² @8% at maturity

Give for 8 years:

₹1.62 lakhs

Know More

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Benefits of an Endowment Policy

Dual Advantage

They provide life cover and act as a savings instrument. This dual benefit means financial protection for your family and a lump sum payout at maturity for your financial goals.

Disciplined Saving

Regular premium payments encourage disciplined saving habits, essential for long-term financial planning.

Financial Security

In the event of the policyholder's untimely demise, the family receives financial support, ensuring their lifestyle is not disrupted.

Maturity Benefits

The sum assured plus any bonuses on maturity can fund major life goals like education, a home, or retirement.

Tax Benefits*

Premiums paid and benefits received are usually eligible for tax benefits* under prevailing tax laws, adding to their attractiveness as a financial tool.

Flexibility

Many plans offer add-ons or riders for additional protection like critical illness cover, accident cover, etc., making them customizable to individual needs.

Salient Features of an Endowment Policy

Maturity Benefit

One of the hallmark features is the maturity benefit, a lump sum payment received at the end of the policy term, provided the policyholder survives the term.

Death Benefit

In case of the policyholder's demise during the term, the nominee receives a death benefit, ensuring financial support for the family.

Policy Term

The duration of these policies is flexible, typically ranging from 10 to 30 years, allowing policyholders to align the term with their long-term financial goals.

Premium Payment Options

Endowment plans offer various premium payment options, including regular pay, single pay, or limited pay, catering to different financial situations.

Bonuses

Participating endowment policies may earn bonuses based on the insurer's performance, adding to the policy's value.

Loan Facility

Many endowment policies allow you to borrow against the policy, providing financial flexibility in times of need.

Riders/Add-ons

Additional coverage options like critical illness riders, accidental death benefits, etc., can be added for more comprehensive protection.

Why Should You Buy an Endowment Policy?

Financial Security for Family

It ensures that your family's financial needs are taken care of in your absence, providing peace of mind.

Goal-Based Saving

The lump sum received at maturity can be aligned with specific financial goals like funding education, buying property, or securing a comfortable retirement.

Forced Savings Discipline

Regular premium payments instil a habit of disciplined saving, which is crucial for long-term wealth accumulation.

Stable Returns with Low Risk

Endowment policies are ideal for those who prefer a stable and relatively low-risk savings instrument compared to direct market-linked investments.

Tax Benefits**

The premiums paid and the benefits received (both death and maturity) usually offer tax benefits** under prevailing tax laws.

Flexibility and Customization

The variety of plans available and the option to add riders mean you can tailor the policy to your specific needs and life circumstances.

Who Should Buy an Endowment Policy?

Criteria	Ideal for Endowment Policy?
Seek Long-Term Savings	✔️
Require Life Cover	✔️
Appreciate Guaranteed Returns	✔️
Have Dependents	✔️
Value Tax Benefits*	✔️
Are Disciplined Savers	✔️
Plan for Major Life Events	✔️

Things to Consider Before Buying an Endowment Policy

Financial Goals

Understand your long-term financial objectives. Endowment policies are best suited for goals that are 10 or more years away.

Risk Appetite

Assess your risk tolerance. Endowment policies are generally low-risk, but if you're looking for higher returns, you might want to consider other options.

Policy Terms and Conditions

Read the fine print. Understand the terms regarding the maturity benefit, death benefit, surrender value, and policy loans.

Premium Affordability

Ensure that the premium fits comfortably within your budget. Remember, defaulting on premiums can lead to a policy lapse.

Inflation

Consider the impact of inflation on your future financial needs. Ensure that the sum assured is adequate to meet your future goals.

Riders/Add-Ons

Explore additional coverage options to enhance your policy. Riders with critical illness or disability can offer added protection.

Reputation of Insurer

Choose a reliable insurer with a high claim settlement ratio, like ABSLI.

Tax Implications

Understand the tax benefits** and implications as per prevailing laws to make an informed decision.

What are the Limitations of Endowment Life Insurance Plans in India?

Lower Returns Compared to Market-Linked Investments

The returns on endowment plans are generally lower than those you could potentially achieve with direct equity or other market-linked investments.

Long-Term Commitment

These plans require a long-term financial commitment, which may not be suitable for those seeking short-term investment options.

Limited Liquidity

Endowment plans are not highly liquid. Early withdrawal or surrender of the policy can result in significant penalties and a lower surrender value.

Inflation Risk

The sum assured may not keep pace with inflation, potentially reducing the purchasing power of the maturity amount.

Complexity and Clauses

Some endowment policies come with complex features and clauses, which may be difficult for the average person to understand fully.

Cost

The cost of endowment plans, considering the premiums and policy charges, can be higher compared to term insurance plans.

What are the Eligibility Criteria for Buying an Endowment Plan?

Age

Most endowment plans have a minimum entry age, often around 18 years, and a maximum entry age, which can vary but is typically around 60 years.

Income Level

While specific income criteria may vary, insurers generally require proof of a stable income to ensure the policyholder can afford the premium payments.

Financial Goals

Endowment plans are suitable for individuals with long-term financial goals, such as retirement planning, children's education, or accumulating wealth.

Risk Appetite

These plans are best suited for individuals with a low to moderate risk appetite, as they offer guaranteed# returns but with lower potential returns compared to high-risk investments.

Health Condition

Applicants may need to undergo a medical examination, and their current health condition can affect eligibility and premium rates.

Policy Term Preference

Applicants should have a clear idea of the policy term they are comfortable with, as endowment plans usually require a long-term commitment.

Premium Payment Capability

Prospective policyholders should have the financial capability to pay premiums regularly over the policy term without financial strain.

Tax Status

Individuals should also consider their tax status, as endowment plans offer tax benefits* which can be an important eligibility consideration for many.

What are the Documents Required for Buying an Endowment Plan?

When applying for an endowment plan, you'll need to provide certain documents for identity verification, financial assessment, and underwriting purposes. Commonly required documents include:

Identity Proof

A valid government-issued ID like a Passport, Aadhar Card, PAN Card, or Driving License

Address Proof

Recent utility bills, Passport, Aadhar Card, or any other government-issued document that verifies your address.

Age Proof

Birth certificate, Passport, PAN Card, or any valid document confirming your age.

Income Proof

Recent salary slips, Income Tax Returns, or Form 16, to verify your financial capacity to pay the premiums.

Photographs

Recent passport-sized photographs.

Medical Reports

If required, based on age and sum assured, medical examination reports.

Application Form

A duly filled and signed policy application form.

What is the Complete Endowment Plan Claim Process?

The claim process for an endowment plan typically involves the following steps

Claim Intimation

Notify us about the claim immediately after the occurrence of the event (death of the policyholder or policy maturity).

Document Submission

Submit all required documents, including the claim form, policy document, death certificate (in case of death), identity proof of the beneficiary, and any other documents requested by the ABSLI.

Claim Processing

We will assess the claim, which may involve verification of documents and, in the case of death claims, possibly an investigation if the policy is relatively new.

Decision

Once the verification is complete and the claim is found valid, we will approve the claim.

Payout

We will disburse the claim amount either as a lump sum or as per the payout method chosen at the inception of the policy.

Dispute Resolution

In case of any disputes or if the claim is rejected, the nominee has the right to appeal or approach a grievance redressal cell.

What Happens When an Endowment Policy Matures?

When an endowment policy reaches its maturity date, several things happen

Maturity Notification

We will notify you about the upcoming maturity of your policy.

Document Submission

You may need to submit certain documents, such as the original policy document, identity proof, and a maturity claim form. We may also require a bank mandate form for direct transfer of the maturity amount.

Maturity Benefit Payout

Once all necessary formalities are completed and documents verified, we will pay out the maturity benefit. This amount typically includes the sum assured along with any accumulated bonuses or profits, as specified in the policy terms.

Policy Closure

After the maturity amount is paid, the policy is closed. There will be no further benefits payable under the policy, and it ceases to provide coverage.

Option for Reinvestment or Annuities

Some policies may offer options to reinvest the maturity amount into another policy or convert it into an annuity for regular income. This is optional and depends on your financial goals.

Are Endowment Plans Tax-Free?

The tax treatment of endowment plans in India is subject to the prevailing tax laws, which can change over time. As of the latest information available

Tax Benefits* on Premiums Paid

Premiums paid towards an endowment policy are generally eligible for tax deduction under Section 80C of the Income Tax Act, subject to certain conditions.

Taxation of Maturity Proceeds

The maturity proceeds from an endowment policy are tax-free under Section 10(10D)** of the Income Tax Act, provided the premium paid does not exceed 10% of the sum assured for policies issued after April 1, 2012. For policies issued prior to this date, the premium must not exceed 20% of the sum assured.

Exceptions

There are certain exceptions to these rules, such as policies for persons with disabilities or specified diseases where the premium threshold is different.

Death Benefit

The death benefit received from an endowment policy is usually tax-free irrespective of the amount.

Looking for Assistance?

Need help with your existing policy?
Call us on our toll-free no. for quick response!

1800 270 7000

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Disclaimer

* Tax benefits are subject to changes in tax laws. Kindly consult your financial advisor for more details
**Sec 10(10D) benefit is available subject to fulfilment of conditions specified therein
^#Guaranteed all due premiums are paid.
For further details regarding the above-mentioned rider, please refer to the respective rider brochure(s) available on our website.
¹ Scenario: ABSLI Akshaya Plan, Age 35, Healthy Male, Premium Payment Term: 6 years, Policy Term: 25 years, Benefit Option: Long Term Income, Premium Rs.1lakh p.a. (Rs.100,000X6), Cash Bonus Payout Frequency: Annual, Sum Assured: Rs 710,000. Assumed @8% p.a., Cash Bonus (if declared) p.a. = Rs 23,004, Total Cash Bonus (if declared) (A)= Rs 5,75,100, Terminal Bonus (If declared) + Sum Assured (B) = Rs 8,73,300, Total Benefit (A+B) = Rs 14,48,400. Assumed @4% p.a., Cash Bonus (if declared) p.a. = Rs 8,520, Total Cash Bonus (if declared) (A)= Rs 2,13,000, Terminal Bonus (If declared) + Sum Assured (B) = Rs 7,95,200, Total Benefit (A+B) = Rs 10,08,200.
² ABSLI Vision Life Income Plan, healthy male, age 21, Sum Assured Rs.10 lakhs. Annualised Premium of Rs.1.62 lakhs approx for premium payment term: 8 years, policy term: 79 years, lump sum benefit of Rs.12000 @4% or Rs.3.44 lakhs @8% in 8th policy year, guaranteed regular income of Rs.50,000 plus bonus for life from 9th year.
³ ABSLI Income Assured Plan, age 21, healthy male, policy term 15 years, premium payment term 5 years, sum assured Rs.5 lakhs, Premium payable every year Rs.1,49,604/-, Income benefit Rs.40,000/- maturity Benefit Rs.8,50,000/- and Death benefit Rs.1,825,900/-.
⁴ ABSLI Vision Endowment Plus Plan, age 21 years, sum assured Rs.200000, premium paying term 7 years- annual, policy terms 10 years, Death benefit option:Option A, annual premium Rs.31,502/- for 7 years, Total total maturity benefit including terminal bonus, if any of Rs.2,39,514/- @4% and Rs. 3,07,514 @8% after 10 years for long term financial needs.
⁵ ABSLI Jeevan Bachat Plan, age 20 years, premium payment term 1 year, policy term 10 years, sum assured Rs.2 lakhs, premium payable Rs.20,900/-, maturity benefit Rs.26,120/-, death benefit Rs.2,06,120/-.
ABSLI Akshaya plan is a non-linked participating individual savings life insurance plan (UIN: 109N136V02)
ABSLI Vision MoneyBack Plus Plan s a traditional participating life insurance plan (UIN: 109N093V04).
ABSLI Vision LifeIncome Plan is a traditional participating endowment plan (UIN: 109N079V06).
ABSLI Vision LifeSecure Plan is a traditional participating whole life insurance plan (UIN: 109N087V04).
ABSLI Income Assured Plan is a traditional non-participating savings plan (UIN: 109N089V06).
ABSLI Vision Endowment Plus Plan is a traditional participating endowment plan (UIN: 109N092V05).
ABSLI Jeevan Bachat Plan is a non-linked non-participating life insurance plan (UIN: 109N107V03).
ABSLI Monthly Income Plan is a participating non-linked life insurance plan (UIN: 109N122V02).
ABSLI Vision Lifeincome Plus Plan is a non-link participating individual life insurance savings plan(UIN:109N131V01)
All terms & conditions are guaranteed throughout the policy term, except for the bonuses which would be declared at the end of each financial year. GST and any other applicable taxes will be added (extra) to your premium and levied as per extant tax laws. An extra premium may be charged as per our then existing underwriting guidelines for substandard lives, smokers or people having hazardous occupations etc.
ADV/4/24-25/144

Give ₹1 lakh for 6 years and get Guaranteed# Returns of ₹14.48 lacs¹.

Endowment Plan

What is an Endowment Policy?

How Do Endowment Plans Work?

Types of Endowment Life Insurance Plans

Benefits of an Endowment Policy

Salient Features of an Endowment Policy

Why Should You Buy an Endowment Policy?

Who Should Buy an Endowment Policy?

Things to Consider Before Buying an Endowment Policy

What are the Limitations of Endowment Life Insurance Plans in India?

What are the Eligibility Criteria for Buying an Endowment Plan?

What are the Documents Required for Buying an Endowment Plan?

What is the Complete Endowment Plan Claim Process?

What Happens When an Endowment Policy Matures?

Are Endowment Plans Tax-Free?

Looking for Assistance?

Latest Life Insurance Articles

Give ₹1 lakh for 6 years and get Guaranteed^# Returns of ₹14.48 lacs¹.