What Is It and Who Is It For?
For people with financial dependants or a long-term savings goal. Consider responsibilities, existing protection and the premium you can keep paying.
Term Plan
Life cover for a stated period. A pure term plan pays an eligible death benefit if the insured person dies during that period; it usually has no maturity payout. Return-of-premium options have different terms and costs.
Endowment Plan
Combines life protection with savings. It provides death and maturity benefits under the policy terms. Guaranteed amounts and any non-guaranteed bonuses must be checked separately.
ULIP
A Unit Linked Insurance Plan combines life cover with investment in selected funds. Fund value can rise or fall with markets, and investment risk is borne by the policyholder. Charges affect the amount invested and the resulting value.
What Does It Usually Cover?
- Death benefit under the chosen plan and its conditions.
- Maturity or survival benefits only where provided by that plan.
- Optional rider benefits, such as accidental death or critical illness, only if selected and applicable.
These are general examples. Benefits, eligibility, limits and exclusions depend on the policy you choose.
Key Terms, Simply Explained
- Sum Assured
- The stated cover amount. The actual death benefit formula depends on the plan.
- Policy Term and Premium Paying Term
- Policy term is how long the policy runs. Premium paying term is how long you must pay premiums. They may differ.
- Maturity Benefit
- The benefit payable at the end of the policy term if the required conditions are met. Pure term cover normally has none.
- Surrender
- Ending a policy early. Payment, charges and loss of benefits depend on the policy and when you exit.
- ULIP Lock-in and Charges
- ULIPs have a five-year lock-in. Fund management, mortality and other applicable charges should be reviewed. A lock-in ending does not make returns guaranteed.
Compare at a Glance
| Feature | Pure Term | Endowment | ULIP |
|---|---|---|---|
| Main purpose | Life protection | Protection and savings | Protection and market-linked investment |
| Maturity benefit | Normally none | As stated in policy | Based on fund value and policy terms |
| Market-linked fund value | No | No direct unit-linked fund | Yes |
| Key point to check | Cover and term | Guarantees, bonuses and exit terms | Risk, charges and five-year lock-in |
Individual products and options may differ. Check the selected policy wording.
What Should You Check?
- Separate your life protection need from your savings goal.
- Compare guaranteed and non-guaranteed figures in the benefit illustration.
- Check the premium commitment, exit terms and consequences of stopping payments.
- Disclose health, occupation and other requested facts accurately; keep nominee details current.
Common Limits and Exclusions
- Claims can be affected by exclusions, including the policy's suicide clause.
- A lapsed policy or inaccurate disclosure may affect benefits, subject to policy terms and applicable law.
- A fund projection is not a guaranteed ULIP return.
A Simple Example
Start with the purpose
Someone wants financial protection for a spouse and child if they die during the next 20 years. A term plan addresses that protection need. If they also want savings, they should compare the separate costs, benefits and risks of endowment or ULIP options.
Illustrative only. This is not a quote or a promise of claim payment.
Details and Documents to Keep Ready
- Identity, age and address proof.
- Income details where required, and nominee details.
- Health declarations and medical tests requested by the insurer.
The insurer may ask for additional information depending on the application or claim.
Frequently Asked Questions
Which of these plans is best?
There is no single best choice for everyone. First decide whether your priority is life protection, savings or market-linked investment, then compare affordability and policy terms.
Are ULIP returns guaranteed?
Market-linked fund returns are not guaranteed. Read the specific policy for any separately stated guarantee and its conditions.
Will every endowment bonus be guaranteed?
No. Some amounts may be guaranteed, while bonuses may depend on the insurer's declarations. Check the illustration and policy wording.
What if I stop paying premiums?
The policy may lapse, become paid-up or be discontinued, depending on the plan and payments already made. Ask for the exact effect before committing.
Get Help from Your Financial Buddy
YFB helps you understand options, organise documents and follow up on claims. The insurer assesses applications and decides claims under the policy terms.
References and Information Notes
General educational information reviewed on 6 October 2026. Insurer examples explain concepts and are not a recommendation of a specific product. Always read the current policy wording and benefit illustration where applicable.