Endowment

An endowment life insurance policy is a type of life insurance policy that provides both insurance coverage and savings/investment benefits. Under an endowment policy, the policyholder pays a fixed premium amount for a specified period, typically ranging from 10 to 30 years

At the end of the policy term, the insurance company pays out a lump sum amount to the policyholder, which includes the sum assured (i.e., the insurance coverage amount) and the bonuses and returns earned on the investment component of the policy. If the policyholder passes away during the policy term, the sum assured is paid out to the beneficiaries

Endowment policies are designed to provide both insurance coverage and savings/investment benefits. They offer a guaranteed return on investment, which makes them a low-risk option for individuals who want to save for their long-term financial goals, such as buying a house or funding their child’s education

However, endowment policies may have higher premiums than other types of life insurance policies, as a portion of the premium is invested in the savings/investment component of the policy. Additionally, the returns on the investment component of the policy may not be as high as other investment options, such as mutual funds or stocks