Key features of an endowment plan:

1. Death Benefit: Like other life insurance policies, an endowment plan provides a death benefit to the beneficiaries if the insured passes away during the policy term. This benefit can help provide financial protection to the insured's family in case of an unfortunate event.


2. Maturity Benefit: If the insured survives the policy term, an endowment plan pays out a lump sum, known as the maturity benefit. This amount includes the sum assured (the coverage amount) and any bonuses or guaranteed additions that may have accumulated over the years.


3. Fixed Term: Endowment plans have a fixed policy term, typically ranging from 10 to 30 years or more. The policyholder pays premiums regularly throughout the term.


4. Savings Component: A part of the premium paid towards the endowment plan is allocated to the savings or investment component. The insurance company invests these funds in various financial instruments, aiming to generate returns over time.


5. Limited Liquidity: Endowment plans may have limited liquidity compared to other types of life insurance policies like term plans. Withdrawing the savings or surrendering the policy before maturity may result in reduced benefits or loss of bonuses.


6. Maturity Payout Options: At maturity, the policyholder typically has the option to receive the maturity benefit as a lump sum or as periodic installments over a specific period.


7. Tax Benefits: In many countries, endowment plans offer tax benefits on the premium paid and the maturity benefit received, subject to applicable tax laws.

Endowment plans are suitable for individuals who seek a combination of life insurance coverage and disciplined savings. They can be used to achieve specific financial goals, such as funding a child's education, building a corpus for retirement, or meeting other long-term objectives. Before choosing an endowment plan, it's essential to understand the policy terms, potential returns, and the charges associated with the plan. Consulting with a financial advisor can help in making an informed decision based on individual financial needs and goals.