An endowment plan, although served to policyholders as insurance plans, are not pure insurance plans. An endowment plan or policy is essentially a life insurance policy, which apart from covering the life of the insured, helps the policyholder save regularly over a specific period of time so that the policyholder is able to get a lump-sum amount at the maturity of the policy if the policyholder survives the policy term.

This maturity amount can be used to meet one’s various financial needs, such as funding one's retirement, children's education and/or marriage or buying a house. A life insurance endowment policy pays the full sum assured to the policy nominees if the policyholder dies during the policy term, or to the policyholder up on maturity of the policy if he/she survives the term.

Thus, endowment plans, fulfill the dual need for a life cover and savings under a single plan. They are one of the traditional forms of life insurance plans available in the Indian market.

Types of endowment plans:

- With profit

- Without profit

Within these two classes there are many variations of endowment plans structured to meet the need of child education, whole life protection and pension, among others.

As explained above, these plans have both death and survival benefit features. But this is not the only difference- as an endowment plan provides survival benefits, too, its premiums are comparatively higher than the pure death benefit insurance plans or the term plans.