What is an Endowment Plan?

An endowment plan is a life insurance plan that offers a life cover¹ and helps you grow your money. It provides returns that are fixed at the time of the purchase of the policy. It can be used to save for various goals like buying a house, your child’s education or marriage, starting a new venture and more.

Below is an understanding of what endowment insurance is and how it can help you.

How does an endowment plan work?

Endowment plans provide you with life cover¹ and also help you grow your money. The life cover¹ secures your loved ones financially in case of an unfortunate event while the returns from the plan help you achieve your financial goals.

Endowment plans offer you the flexibility to choose the premiums you want to pay towards your plan. You may pay your premiums monthly, half-yearly, yearly or all at once depending on the type of plan you choose. The life cover¹ offered by your endowment plan would be 10 times your annual premium.

Endowment plans provide you with a fixed amount called the maturity amount at the end of the tenure of the plan. This maturity amount is fixed at the time of the purchase of the plan itself and is free from any market fluctuations.

In case of an unfortunate event during the tenure of your plan, your loved ones will receive the life cover¹ amount offered by your plan and any additional amount as specified in your plan.

Who should consider buying an endowment plan?

An endowment plan can be ideal for creating an alternative source of income. It can offer you a lump sum income in the future. In addition, the plan provides your loved ones with financial protection in case of an unfortunate event. This type of life insurance can be suitable if you want to build savings at low risk while securing your loved ones financially.

What is an endowment fund?

An endowment fund is a type of insurance plan that provides fixed returns along with a life cover¹ that protects the financial needs of your loved ones. It can be used to build low-risk savings for your future needs and to secure your family in your absence. Here are some characteristics of an endowment fund:

Dual benefits of insurance and savings
Low-risk savings and guaranteed returns^{^^} at maturity
Flexibility to select the premium payment method
Tax benefits under Section 80C^* and Section 10(10D)^* of the Income Tax Act, 1961

What are the benefits of an endowment policy?

Life cover

An endowment policy offers a life cover¹ that can help you secure your loved ones financially in your absence. The plan pays an assured payout to the nominee in case of an unfortunate incident during the policy term.

Wealth Creation

An endowment plan can be used to create wealth. The plan offers guaranteed returns^^ that can help you save wealth for your future needs.

Maturity Benefits

An endowment policy offers a maturity benefit to the policyholder when the tenure ends, ensuring future financial stability.

Flexibility in paying premiums

The premiums for an endowment plan can be paid in flexible instalments, either monthly, semi-annually, annually or all at once.

Tax Benefits

The premium paid towards an endowment plan qualifies for a deduction of up to ₹ 1.5 lakh subject to conditions prescribed under Section 80C^* of the Income Tax Act, 1961. Additionally, the death benefits are exempt subject to conditions prescribed under Section 10(10D)^*.

ICICI Pru Gold plan

1. Get Regular Income^~ with a lump sum at maturity^{^} with three plan options:

Immediate income
Immediate income with booster
Deferred income

2. Tax^* deductions of up to ₹ 46,800 p.a on premiums paid under Section 80C^* and the returns received are exempt as per the conditions under Section 10(10D)^* of the Income Tax Act, 1961.

3. Get 3% additional Survival benefit^$ and Sum assured at maturity on purchasing the policy online.

Salient features of ICICI Pru Gold plan

ICICI Pru Gold is a protection and savings plan. This plan allows you to prepare for your financial goals, such as buying a house, your child’s education and marriage, your retirement and more. The plan offers moderate risk and helps you save tax* subject to conditions under The Income Tax Act, 1961.

Features and benefits of the ICICI Pru Gold plan:

Choice of 3 customisable plan options^~ - immediate income, immediate income with booster and deferred income
Unique savings wallet^$ that helps you pay your premiums, accumulate survival benefits^$ and withdraw the balance in the wallet completely or partially as per your choice
Tax^* benefits on premiums paid and returns received
Life cover¹ for the entire policy term to secure your loved ones financially

W/II/2174/2022-23

Frequently asked questions

1. What are the guaranteed return components in an endowment policy?

An endowment policy provides a guaranteed^^ maturity benefit if the policyholder survives the policy term. It also offers a guaranteed^{^^} death benefit in case of an untoward incident during the policy term.

The policy may also offer bonuses; however, these values are not guaranteed and can vary depending on several factors.

2. Can I take a loan against my endowment policy?

Yes, you can apply for a loan against your endowment policy. However, you must refer to your policy document for specific terms and conditions before applying for a loan.

3. How are premiums calculated for an endowment policy?

Premiums are calculated based on factors such as the sum assured, your age, policy tenure, gender and other relevant details.

4. What are the factors to be considered before buying an endowment policy?

You must consider the premium payment terms, total premium amount, bonuses offered and the reputation of the insurance company before buying an endowment policy.

COMP/DOC/Feb/2025/202/8451

5. What are the extra bonuses provided in an endowment policy?

An endowment policy may offer extra bonuses, including accrued reversionary bonuses, interim reversionary bonuses and a terminal bonus. Reviewing the policy documentation to understand the specific terms and conditions associated with these bonuses is essential.

6. How can I decide whether to get an endowment policy?

Deciding whether to get an endowment policy depends on your financial goals and risk tolerance. If your primary goal is to save money for long-term objectives while minimising risk, an endowment policy could be a suitable choice. Endowment plans offer a dual combination of life insurance coverage* and savings with guaranteed^^ benefits, making them a low-risk investment option.

However, it is important to consider factors like the policy's premium, policy term and expected returns when making your decision. Additionally, you must compare different endowment plans to select one that aligns with your financial goals and risk appetite.

7. When is the right time to buy an endowment plan?

The right time to buy an endowment plan depends on your financial goals and individual circumstances. While there is no appropriate time, starting early can offer distinct advantages. Buying an endowment plan at a younger age provides you with a longer savings period. This allows you to accumulate substantial savings over time. Premiums are also generally lower when you are younger.

Additionally, buying an endowment policy early ensures your loved ones' financial security in the event of an untimely demise. If you have specific long-term financial objectives like purchasing a house or funding a child's education, purchasing an endowment plan early can help you work toward these goals.

8. Can the beneficiary of my endowment policy be changed?

Yes, in most cases, you can change the beneficiary of your endowment policy. It is advisable to review and update your beneficiary with respect to changes in your life stage, such as marriage, divorce, the birth of a child or the demise of a beneficiary. This ensures the policy's benefit goes to the intended person according to your current wishes.

9. Does an endowment plan provide a lump sum payout?

Yes, an endowment policy provides a lump sum payout at maturity as long as the policy is active and all premium payments have been made. You receive the predetermined lump sum amount, also known as the maturity benefit, at the end of the policy's term. This lump sum can be used for various financial goals, such as covering retirement expenses, buying a house or any other intended use.

10. Can I discontinue my policy?

Yes, you can discontinue your endowment policy by surrendering the policy. However, it is important to consider the implications of this action. Surrendering a policy means you will not receive the full maturity benefit and may lose out on potential bonuses and savings. It is advisable to carefully evaluate your financial situation and the reasons for discontinuing the policy before making a decision.

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Disclaimers

¹Life cover is the benefit payable on death of the Life Assured during the policy term.

^{^}For all plan options, on survival of the life assured till the end of policy term for a fully paid policy, Maturity Benefit will be sum of

Sum Assured on Maturity, plus

Balance in the Savings Wallet (if any), plus .

Terminal Bonus (if declared)

The Sum Assured on Maturity shall be the sum of Annualised Premium payable under the policy.

In all plan options, guarantee is in the form of ‘Guaranteed income’ as regular income and ‘Sum assured on maturity’ as a part of Maturity Benefit. Additionally, in ‘Immediate Income with booster’ plan option, the ‘Guaranteed booster’ also forms a part of guaranteed benefits. Guaranteed returns are payable subject to all due premiums being paid and survival of the life assured

^*Tax benefits under the policy are subject to conditions under Sections 80C, 10(10D), 115BAC and other provisions of the Income Tax Act, 1961. Goods and Services Tax and Cesses, if any will be charged extra as per applicable rates. Tax laws are subject to amendments from time to time. Please consult your tax advisor for more details

^~Income: In plan option ‘Immediate income’ and ‘Immediate income with Booster’, starting from the first policy year till the end of the policy term, you will receive a regular income at the end of every policy year/month, as chosen by you, provided the policy is in-force. For “Immediate Income with Booster”, along with the regular income, you will also receive a benefit (known as Guaranteed Booster) every 5th policy year provided the policy is in-force. This Guaranteed Booster will be equal to 100% of the Guaranteed Income, as applicable for the year of payment.

In ‘deferred Income’ plan option, you will receive regular income at the end of every year/month, starting from end of deferment period as chosen by you, provided the policy is in-force. You can start this income as early as 2nd policy year or as late as Premium Payment Term plus 1 year.

This regular income will comprise the following:

Guaranteed Income (GI) and

Income which will be linked to Bonus, if declared; referred to as Cash Bonus (CB) You will receive this income till the date of maturity, death, surrender or lapse of the policy, whichever happens first.

^$Savings wallet: You have an option to accumulate the Survival Benefit, instead of taking the same as a periodic payment during the policy term. You need to opt in for this feature through explicit consent vide request submitted to Us, whereby the Survival Benefit when due will be transferred to the Savings Wallet. Upon crediting the Survival Benefit in the Savings Wallet on the due date, the Survival Benefit will be deemed to have been paid and any amount within the Savings Wallet will be non-participating in nature. This option can be opted for and opted out of at any time during the Income Term. The money within the wallet will be accumulated daily at an interest rate linked to the Reverse Repo Rate published by Reserve Bank of India (RBI). The interest rate used for accumulation under this feature will be reviewed twice every year on 1st of June and 1st of December, and will be set equal to Reverse Repo Rate published on RBI’s website as on the review date. The current Reverse Repo Rate as at June 1, 2022 is 3.35% p.a. In case the balance in the wallet is not withdrawn completely during the income term, such balance will be paid to the claimant in the event of death, surrender or maturity, whichever is earlier along with other benefit payments (if any). On payment of this benefit, the policy will terminate, and all rights, benefits and interests under the policy will stand extinguished. Please refer to the sales brochure for more details.

^{^^}Guaranteed benefits are payable depending on the plan option chosen, subject to all due premiums being paid.

ICICI Pru Gold (Non-linked Participating Individual Life Insurance Savings plan) – UIN:

E/II/0700/2022-23

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