Endowment policies cover the risk for a specified period at the end of which the sum assured is paid back to the policyholder along with all the bonus accumulated during the term of the policy.
It is this feature - the payment of the endowment to the policyholder upon the completion of the policy’s term - which rightly accounts for the popularity of endowment policies.
Typically, one’s responsibility for the financial protection of the family reduces significantly once the children are grown up and independently settled.
The focus then shifts to managing a smaller family - perhaps only oneself and one’s spouse - after retirement.
This is where the endowment - the original sum assured and the accumulated bonus - received back comes handy.
You can either use the endowment amount for buying an annuity policy to generate a monthly pension for the whole life, or put it in any other suitable investment of your choice.
This is the major benefit of an endowment policy over a whole life one.
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