How to Build Savings with an Endowment Plan

Understand how endowment plans create a robust foundation for future financial security.
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3 min
30-May-2025

If you have ever wondered how to save smartly while also protecting your family’s future, an endowment plan could be just what you need. It’s a unique life insurance policy that combines protection with disciplined savings — helping you reach important life milestones like a child’s education, a dream wedding, or a peaceful retirement.

Offers guaranteed savings benefit and insurance coverage

Your money grows safely — and your family stays protected.

An endowment plan offers a powerful combination of life insurance + guaranteed savings. Here’s how it works:

  • You pay premiums regularly (or once).
  • If something happens to you, your family receives the sum assured.
  • If you outlive the policy term, you get the maturity benefit + bonuses.

This means you are building wealth without any compromise on protection. It’s a win-win for long-term planners.

Want a plan that grows your savings and protects your loved ones? Explore endowment savings plans now – Get quote!

Offers option for regular premiums to encourage disciplined savings

Turn monthly savings into a lifelong habit.

Endowment plans help you save consistently over time. Choose a payment option that fits your life:

  • Regular premiums: Pay monthly, quarterly, or annually — just like a savings plan.
  • Limited premiums: Pay for a few years and stay covered till the end.
  • Single premium: Invest once and enjoy long-term benefits.

This structure encourages a disciplined approach to saving, which is essential for big life goals.

Ready to start small and grow big? Check life insurance plans with savings component and get quote!

Offers tax benefits with endowment plans

Endowment plans also offer significant tax benefits, which make them an attractive savings option. The premiums paid and the maturity benefits are eligible for tax exemptions under the Income Tax Act, 1961.

Section 80C:

Premiums paid toward the policy are deductible up to Rs. 1.5 lakh annually.

Section 10(10D):

Maturity benefits, including bonuses, are tax-free under certain conditions.

These tax advantages ensure that you not only build your savings but also reduce your tax liabilities, helping you maximise returns.

Option to add riders to enhance coverage

To make an endowment plan more comprehensive, insurers offer additional riders that enhance the coverage and provide financial protection against unforeseen events.

Critical illness rider:

Provides a lump sum amount if diagnosed with specified critical illnesses.

Accidental death cover:

Offers additional payout if the policyholder dies due to an accident.

Disability rider:

Offers financial support in case of total or partial disability.

These riders turn your savings plan into a comprehensive financial shield — customised to your unique needs.

Want a plan tailored just for you? Compare endowment plans with riders, check premiums and get quote!

Pro Tip

Create wealth and meet your financial goals with a ULIP investment plan, start investing from Rs. 3,000/month.

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Offers flexible payment modes

Endowment plans offer flexible payment options to ensure they cater to different financial capacities and needs. This flexibility allows individuals to choose the payment method that aligns with their income and financial goals.

  • Monthly payments: Suitable for salaried individuals who prefer smaller contributions.
  • Quarterly or half-yearly payments: Ideal for managing finances systematically.
  • Annual payments: Allows individuals to plan premium payments once a year.
  • Single premium payment: Pay the entire premium upfront and enjoy lifelong benefits.These flexible modes ensure that saving through an endowment plan is convenient and manageable for everyone.

Conclusion

An endowment plan is more than just insurance — it’s a disciplined and rewarding way to build long-term savings while protecting what matters most. With guaranteed benefits, tax advantages, and optional riders, it fits seamlessly into your life, whether you’re planning for a milestone or simply want to grow wealth securely.

Don’t wait to start your savings journey. Explore life insurance plans designed to match your goals and protect your tomorrow. Get quote!

Frequently asked questions

What are the guaranteed benefits of savings plan?
Endowment plans offer guaranteed maturity benefits, including the sum assured and bonuses. These benefits ensure financial security for policyholders and their families at the end of the policy term.

How do endowment plan premiums contribute to savings?
Premiums paid towards an endowment plan are systematically invested to build a savings corpus. Regular premium payments encourage disciplined saving and ensure financial growth over time.

Can you save taxes with endowment plans?
Yes, premiums paid under endowment plans are eligible for tax deductions under Section 80C, and the maturity benefits are tax-free under Section 10(10D) of the Income Tax Act.

Can riders enhance endowment benefits?
Yes, riders like critical illness cover, accidental death benefit, and disability cover can be added to an endowment plan to enhance protection and provide additional financial security.

Do endowment plans offer flexible payment options?
Endowment plans offer flexible payment options such as monthly, quarterly, half-yearly, annual, or single premiums, making it easy to manage savings according to your financial capacity.

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*T&C Apply - Bajaj Finance Limited (‘BFL’) is a registered corporate agent of third party insurance products of Bajaj Allianz Life Insurance Company Limited, HDFC Life Insurance Company Limited, Life Insurance Corporation of India (LIC), Bajaj Allianz General Insurance Company Limited, SBI General Insurance Company Limited, ACKO General Insurance Company Limited, HDFC ERGO General Insurance Company, TATA AIG General Insurance Company Limited, ICICI Lombard General Insurance Company Limited, New India Assurance Limited, Chola MS General Insurance Company Limited, Zurich Kotak General Insurance Company Limited, Star Health & Allied Insurance Company Limited, Care Health Insurance Company Limited, Niva Bupa Health Insurance Company Limited, Aditya Birla Health Insurance Company Limited and Manipal Cigna Health Insurance Company Limited under the IRDAI composite registration number CA0101. Please note that, BFL does not underwrite the risk or act as an insurer. Your purchase of an insurance product is purely on a voluntary basis after your exercise of an independent due diligence on the suitability, viability of any insurance product. Any decision to purchase insurance product is solely at your own risk and responsibility and BFL shall not be liable for any loss or damage that any person may suffer, whether directly or indirectly. For more details on risk factors, terms and conditions and exclusions please read the product sales brochure & policy wordings carefully before concluding a sale. Tax benefits applicable if any, will be as per the prevailing tax laws. Tax laws are subject to change. BFL does NOT provide Tax/Investment advisory services. Please consult your advisors before proceeding to purchase an insurance product. Visitors are hereby informed that their information submitted on the website may also be shared with insurers. BFL is also distributor of other third-party products from Assistance service providers such as CPP Assistance Services Private Limited, Bajaj Finserv Health Limited. etc. All product information such as premium, benefits, exclusions, value added services etc. are authentic and solely based on the information received from the respective Insurance company or the respective Assistance provider company.

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