Death along with survival benefits: Endowment plans are unique in the sense that the these plans guarantee the payment of benefits to the policy holder in the event of she/he survives the term of the plan and also entitles her/nominee(s) to receive the sum assured together with other additional bonuses in the event of the policy holder’s demise during the plan term.
Higher returns: The feature of extra bonuses means that the overall returns from an endowment plan tend to be higher than that from any traditional life insurance plan or term insurance plan. Since apart from the regular sum assured, additional payable amounts are combined, hence the plan benefits are higher.
Premium-payment frequency: Generally, the insurers offering endowment plans offer quite flexible premium-payment terms. This means that the policy holder can pay the premium in a frequency chosen as per her/his convenience. The frequency can be monthly, bi-annual, annual or even a one-time lump sum payment.
Flexibility in cover: An endowment plan offers the benefit of flexible coverage and the policy holder can choose to purchase additional benefits in the form of riders like partial/total disability riders, critical illness riders, accidental death rider etc. This impacts the payable premiums but the scope of coverage becomes very flexible.
Income Tax benefit: An endowment plan comes with tax benefits because the payable premiums as well as the main plan benefits (sum assured and the maturity proceeds) are eligible for tax-exemption under Sections 80C and 10D of the Income Tax Act, 1961.