What is Sum Assured in Endowment Policy?
Close
Close

Buy a Life Insurance Plan in a few clicks

Now you can buy life insurance plan online.

Kotak e-Term Plan

Protect Your family’s financial future with Kotak e-Term Plan. Know more

Kotak Assured Savings Plan

A plan that offer guaranteed returns and financial protection for your family. Know more

Kotak Guaranteed Savings Plan

A plan that offers long term savings and insurance in one premium. Know more

Kotak e-Invest

Insurance and investment in one plan with Kotak e-Invest. Know more

Kotak Health Shield

Insurance against medical expenses related to heart, brain, liver and Cancer. Know more

What is Sum Assured in Endowment Policy?

What is Sum Assured in Endowment Policy?
  • 11th Jul 2022 |
  • 2,961

Endowment policies offer both insurance cover and maturity benefits. Most people find this as a good alternative for investing savings and achieving their life goals. However, the concept of sum assured might sound a little complicated in this case as the product is different. Unlike term life insurance plans, where the sum assured is simply a death benefit, endowment policies are different.

In this article, we will help you understand what endowment policies are and what is sum assured in endowment policies so you are well-aware about the nitty-gritty of the product.

What is an Endowment Policy?

Before taking you all the way directly to endowment policy math, let’s briefly understand what it means.

An endowment policy is a life insurance policy that, along with offering life insurance to the insured, helps the policyholder accumulate money regularly through savings over the specific term of the policy. This gives the policyholder enough corpus by the time the policy matures. In addition, this allows them to get a decent lump sum if the policyholder survives the term. On the other hand, in the case of an unfortunate demise of the policyholder, the nominee is also offered a decent amount as a part of the life insurance under the endowment plan.

The maturity amount that one receives at the maturity of the endowment plan can be used for various purposes like education funding, down payment of house loans, retirement corpus, marriage fund, etc.

What is Sum Assured in Endowment Policy?

Sum assured in an endowment policy is the amount that the policy nominee receives in case of the policyholder’s unfortunate demise. Since an endowment policy is a life insurance product, the policyholder’s life is insured, and the sum assured amount is defined at the beginning of the policy based on factors like how much premium you are willing to pay and what the insurance provider has to offer. Thus, sum assured is the fixed value finalized at the policy enrollment that the nominee will receive in case of the policyholder’s death.

However, if the policyholder survives the entire term of the policy, then they are entitled to receive the sum assured in the form of maturity benefit.

Benefits of an Endowment Policy

In general, any life insurance policy that offers lump sum maturity benefits and a savings component can be termed an endowment policy, be it a ULIP or non-ULIP plan. Although in the financial arena, only a non-ULIP plan with a savings plan component is believed to be an endowment plan. There are multiple benefits of opting for an endowment policy. Here are some of the important ones:

- Wealth Creation: An endowment plan provides the policyholder with an opportunity to build a corpus while being secured with life insurance.

- Bonuses: An endowment plan policyholder is entitled to various types of bonuses. The insurance company declares these bonuses. Bonuses are an extra amount of money additional to the proceeds of investment that are paid by an insurer to the policyholder for various criteria like loyalty bonus, terminal bonus, etc.

- Additional Rider: The endowment plans allow you to add insurance riders to your policy to make it a perfect policy for all your needs. You can add riders like critical illness riders, disability riders, accidental death riders, etc.

- Tax-free maturity benefit: The sum assured and bonuses a policyholder receives upon surviving the policy term are exempted from tax.

Conclusion

There are different endowment policies like the Unit Linked Endowment Plan, Profit Endowment Plan, low-cost endowment plan, no profit endowment, and guarantee endowment policy. Based on the financial requirements and goals, an individual can pick the one that best matches their investment criteria. The endowment policy is an excellent way of accumulating and saving money by cutting wasteful expenditures like window shopping and online shopping addiction.

Kotak e-Term Plan

Download Brochure

Features

  • Nominal Cost
  • Multiple Plan Options
  • Flexible Payout Options
  • Critical Illness Rider
  • Tax Savings
  • Long term Coverage

Ref. No. KLI/22-23/E-BB/492

T&C

Browse our library of resources

- A Consumer Education Initiative series by Kotak Life

Similar Articles

Unit-Linked Life Insurance (ULIPs) vs. Term Insurance

Term Insurance Vs Car Insurance: A Budgetary Choice You'll Regret

What is the Current Trend in Term Insurance?

Kotak Life Claim Settlement Ratio

Who Is A Nominee In A Life Insurance Plan?

Life Insurance and Retirement Planning

Term Insurance Vs Life insurance: Small Details, Big Differences

Comparing low premium term insurance Is Not the Only Factor While Buying Life Insurance

Role of Life Insurance in Your Financial Portfolio

Difference Between Money Back and Endowment Policy

Types of Life Insurance Policies in India

Different Kind of Deaths that are Not Covered in a Term Insurance Plan

Do Your Financial Planning with Life Insurance!

जीवन बीमा पर ऋण

5 Things to Consider Before You Buy Life Insurance

How Does Life Insurance Work?

7 Superficial Reasons People Avoid Buying Insurance Online

Guidelines for Linking Aadhar and PAN to Insurance Policies

Life Insurance for Millennials

Can You Transfer Life Insurance Policies to Another Company in India?

Life Insurance Vs. Mutual Funds Investment

Why Do Life Insurance Agents Avoid Selling Term Plans?

All About Backdating in Life Insurance

What Should One Expect During the Medical Evaluation for Life Insurance?

Can You Apply For A Life Insurance After Getting Heart Attack? Here is Everything You Need To Know

Nominee in insurance - A Complete Guide on nomination in insurance

Take 100% Responsibility of Your Family with Term Life Insurance

Reasons Why Term Insurance Claims Get Rejected

Biggest Life Insurance Myths

Always keep your Nominee informed

Why Renewal of Term Insurance Plan is Important

Can An Individual Buy Multiple Term Insurance Plans?

What is Life Insurance?

Best Insurance Plans in India

Terms and Conditions of Term Insurance Plans

How to Buy a Term Life Insurance Online

NRI Premium Payment Options

Is It Time to Review Life Insurance Policy of Yours?

Is Life Insurance an Investment?

5 Ways to ensure faster settlement of claims

What Happens If I Stop Paying My Life Insurance Premium?

Term Insurance Claim Process

What Is Staggered Payment Option Under Term Insurance Policy?

क्या जीवन बीमा एक निवेश है?

What Is Surrender Value (Cash Surrender Value) in Insurance and how is it calculated?

How to Make Death Claims on Life Insurance?

How Often You Must Review Your Life Insurance Policy?

जीवन बीमा क्या है?

How To Choose The Right Life Insurance

5 Smart Steps to keep in mind while buying term policies

Term Insurance for Home Loan: How Term Plan Helps in Paying Off Home Loan?

Think About Life Insurance Sooner than Later

Beware of Phishing & Fraud Insurance Calls

What Is a Whole Life Insurance Plan?

Savings cum Protection Plans Secures Your Family from Unforeseen Events

All about IRDAI

How to Revive the Lapsed Life Insurance Policy?

Benefits of Buying Term Insurance Plan for Senior Citizens in India

Is it Possible to Make Changes in a Term Plan’s Specification Post Purchase?

10 Most Frequently Asked Questions - FAQs on Term Insurance

Types of Insurance You Must Invest in for Secure Future

What Is the Procedure to choose a nomination in life insurance policy?

Difference Between ULIP and Endowment Plan?

ULIPs: Suitable for all

Choosing Between Short-Term & Long-Term Insurance Plans

Voluntary Life Insurance Policy Vs Group Life Insurance

What is Human Life value and a Human Life Value Calculator?

How to Choose a Life Insurance Policy

6 Different Types of Insurance Policies

Can NRI Buy Life Insurance in India?

Health Insurance VS Life Insurance

Different Types Of Life Insurance In India

Why Term Insurance for Women is Important?

What Is The Life Insurance Penetration In India And How Does It Compare Globally?

Life Insurance and Millennials

What is Underinsurance & The Dangers of Being Underinsured

5 Things to Keep in Mind While Buying Life Insurance Policy

Choose the Nominee of a Term Life Insurance Plan Wisely

What is Group Insurance?

Does Life Insurance Policy Cover Covid Death?

Top 5 Common Life Insurance Myths and Facts

Importance of Checking Claim Settlement Ratio before Buying Life Insurance

When Should You Review Term Life Insurance of Yours?

What is an Endowment Plan?

Insurance Changes You Need to Make Post Marriage

Does Life Insurance Cover Terminal Illness?

Guide for Buying Online Term Insurance Plans for Senior Citizens

Details Required To Be Filled In A Life Insurance Form

Key Things to Review in Your Life Insurance Policy Document

5 Reasons Why You Need Life Insurance in College

What Is Social Impact Investing and How Does It Benefit Society?

How Much Life Insurance Costs and How Much Insurance Cover You Need?

FAQs on Life Insurance

What is a Single Premium Term Plan and its Tax Benefit?

What Is Insurance Rider and It’s Benefits?

A Step-by-Step Guide: How To Make An Investment Plan?

A Term Insurance Guide for Disabled People

What are robo-advisors in insurance?

Life Insurance Plans for Women

What is Minimum Life Insurance Policy?

What is Insurance Coverage? Overview, Types, and Examples

Why You Should Buy Term Insurance under the MWP Act (Married Women’s Property Act)?

Why Life Insurance Is Always a Smart Decision

Is Voluntary Life Insurance the Same as Basic Life Insurance?

Choosing a Life Insurance Beneficiary

भारत में जीवन बीमा पॉलिसियों के प्रकार

Health Insurance VS Life Insurance

Sabse Pehle Life Insurance

What are the Benefits of Endowment Policy?

What Is Financial Planning?

Difference Between Insurance and Assurance?

Process of Filing A Claim For Life Insurance

What Is Investment Insurance?

Life Insurance Policy Closure

Term Life Insurance Vs Money Back Life Insurance

Is it Possible to Reduce Life Insurance Premium without Affecting Sum Assured?

Compare Different Life Insurance Products Offered By Kotak Life

When are Millennials required to take out a life insurance policy?

1 CR Term Insurance Plan: How to Pick the Best 1 CR Term Plan

How To Use Different Types Of Life Insurance For Retirement Planning?

Most Common Life Insurance Riders to Enhance Your Existing Policy

Term Life Insurance vs Accidental Death Insurance

How to Select a Perfect Life Insurance Policy in India to Protect Your Future?

Different Types of Insurance Policies in India

Difference Between Term Insurance and Endowment Plan

Loan Against Life Insurance Policy

Is it Worth Buying Disability Rider on Term Insurance?

Why is Medical Test Important While Buying a Term Insurance?

What is the Difference Between Limited and Regular Pay Insurance Plan?

Are Deaths Due To Coronavirus Covered by Kotak E-Term Plan?

First Job? Here’s Some Tips on How to Manage Finances

Types of Life Insurance Or One Investment, Many Options

9 Most Important Things You Must Learn About Paying Life Insurance Premium

Everything You Must Know About ULIP Riders

Insurance Vs Investment - A Guide to Your Financial Goals

All about Your Rights and Duties While Buying Life Insurance Policy

Why Your Family Should Know About Your Life Insurance Policy?

Important Factors to Consider While Choosing the Right Term Period for Your Term Insurance Plan

Can a Term Plan be the Substitute for a Retirement Plan?

Life Insurance Beneficiary

How to Calculate Human Life Value(HLV)?

Why do I Need Life Insurance?

Role of IRDAI in the Insurance Sector

Digital Life Certificate for Pensioners Seeking Pension

All About Life Insurance and How It Works?

How Much Life Insurance Do You Need?

How Many Insurances Should I Have?

5 Benefits of Gifting Life Insurance Cover to Your Spouse

Important Features of a Term Insurance Plan

5 Easy Steps to Buying A Policy

How to Find the Best Term Insurance Plan in Seven Steps

Is Life Insurance For Millennials Really Needed?

Various Term Insurance Premium Payment Options Available in India

Does Life Insurance Pay for Suicidal Death?

Do Life Insurance Premiums Increase Every Year?

All You Need to Know About Life Insurance - Its Benefits, Features, and Types of Life Insurance

How to Choose Life Insurance for All Ages?

Why do most Indians choose the wrong way to buy life insurance?

Why One Must Buy Term Insurance before 25 Years

In India, should NRIs purchase life insurance?

How Much Life Insurance Cover Do I Need?

What is a savings plan?

How Do Term Insurance Plans Differ for Smokers?

All about Life Insurance Calculators

How to Choose the Right Life Insurance Policy for Your Age?

Customer Awareness on Information Security

Life Insurance for Overweight Applicants

Benefits of Term Insurance with Critical Illness Rider

5 Advantages of Life Insurance Going Digital

Does Family History Affects your Term Life Insurance Rates?

5 Common Life Insurance FAQs and Answers

Important Terminologies of Life Insurance

How to Customize Your Life Insurance Policy with Riders

5 Reasons Why a Women Should Buy a Life Insurance

How to Buy a Life Insurance Plan?

Life Insurance for Overweight Applicants

Term Insurance Tips for NRIs in India

What Should One Consider Buying: Term Insurance or Traditional Life Insurance

Term Plan with Return of Premium (TROP)

Why Buying a Term Insurance is Important for all Parents

Life Insurance with Money Back vs Without Money Back

Important Life Insurance Terms You Must Know

Life Insurance vs Mutual Funds

Adding A Child to Your Life Insurance Policy?

Staying Insured While Investing

6 Things You May Not Know about Life Insurance

Is It Advisable To Have Multiple Life Insurance Policies?

“Life” Insurance or “Death” Insurance?

Why Online Term Insurance Plans Cheap?

Why You Should Never Cancel Life Insurance Policy