Definition of Terms
Term
ENDOWMENT PLAN
raagvamd, RaagVamdatt |
This is a kind of life insurance plan. The premium paid for an Endowment Plan is partly used to secure insurance for the life of the person, and partly used as investment for generating returns. Due to this, the premium for Endowment Plans is significantly higher than that of a Term Plan for the same amount of sum insured.
Since this is an insurance plus investment type of plan, an amount equal to the sum insured plus the accumulated bonuses (earned out of the investments made using part of the premium) is paid to the insured person if he survives the tenure of the policy. If the insured person expires during the tenure of the policy, the sum insured plus the accumulated bonuses is paid to the nominee.
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