What is the difference between term insurance and endowment plan?

Term insurance plans only provide protection for the term specified in the policy document. Endowment insurance plans provide protection along with an investment opportunity. They offer just the death benefits. They offer death as well as maturity benefits.

What is better term plan or LIC?

Death Benefit- The most common difference between term insurance and traditional life insurance plan is that a term insurance plan only provides a death benefit in case of demise of the insured within the term period, whereas a life insurance policy offers both death and maturity benefit to the insured.

Is it worth buying endowment plan?

Endowment plans are a good investment tool. These plans are beneficial since this is a long-term plan and offers good returns over a long period. One of the major benefits of an endowment plan is that it provides an option to invest money in a disciplined and well-organized way to fulfill financial requirements.

What are the benefits of endowment policy?

Yes, an endowment plan offers guaranteed returns at the time of maturity, given all the premiums are paid in full. This is called the guaranteed maturity benefit. Endowment plans also offer a life cover that pays out a lump sum to your loved ones in case of an unfortunate event during the policy term.

What are its major distinctions with term plans?

The first and the major difference that lies between a term plan and an endowment plan is the very nature of the plans. Term plan offers no such long-term saving options. If you buy a term plan, the beneficiaries will receive the guaranteed death benefit only in case of your untimely demise.

Why are endowment plans bad?

Here is the truth about endowment plans. By design, endowment policies are debt-heavy—that is, they invest only in approved debt or government securities, and not equities. Consequently, they cannot generate returns comparable to Ulips with an equity component.