Term vs Endowment LIC plans, explained without jargon

Term insurance and endowment plans solve different problems. Term insurance is mainly protection: it gives a large life cover for a lower premium. Endowment plans combine insurance with disciplined savings and a maturity value.

Use term cover for income protection

If your family depends on your income, the first question is the cover amount. Loans, children's education, household expenses and spouse income all matter. A lower premium helps you buy adequate cover without straining cash flow.

Use endowment only when the goal fits

Endowment plans can help people who want forced savings, predictable maturity value and lower market volatility. They are not a substitute for adequate pure protection if your family needs a large safety net.

Common mistake

Many buyers compare only premiums. A better comparison is: how much protection does the family need, how much can you commit yearly and how long can the money stay invested?

Documents to keep ready

• PAN and Aadhaar.
• Income proof.
• Nominee details.
• Medical history and existing policy details.

Before buying, ask for a written comparison of cover amount, premium term, maturity value, exclusions and claim process.