• Dual purpose: Endowment policies serve two functions. For starters, it offers life insurance coverage, which means that if the policyholder dies within the policy term, the beneficiaries get a death benefit. Second, it accumulates financial value over time by allocating a part of the policyholder's premium payment to investments or a savings account.
• Maturity benefit: Unlike term life insurance, which only provides a death benefit, an endowment policy ensures a payment, known as the maturity benefit, if the policyholder lives the policy period. This lump sum payment may be utilised for a variety of reasons, including school finance, property purchase, and retirement income supplementation.
• Fixed term: Endowment plans have a set period, which usually ranges from 10 to 30 years. The policyholder pays regular/limited premiums throughout the premium-paying period and receives the maturity benefit if they live to the end of the insurance term. The death benefit is provided to the beneficiaries if the policyholder dies within the term.
• Savings and investment component: The insurance firm invests a part of the premium paid for an endowment policy on behalf of the client. Investments may be made in a variety of financial instruments such as bonds, equities, or other assets. The cash value of the insurance builds over time, and the policyholder may be able to withdraw or borrow against it.
• Guaranteed returns: Endowment plans sometimes have guaranteed returns, which indicates that the insurance provider promises a minimum payment after the term, regardless of how the underlying assets perform. However, depending on investment performance, real returns may surpass the promised amount.

Endowment plans are often thought of as a mix of life insurance and long-term savings or investment. They are appropriate for those who wish to assure a guaranteed payment at a certain future date in addition to life insurance coverage. Before making a selection, it is critical to thoroughly evaluate the conditions, returns, and expenses connected with an endowment policy, since they may be more costly than pure life insurance plans (Term Insurance) or other investment possibilities.