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The goal of an endowment policy is to cover the life of the policyholder as well as to enable him to save regularly so that he can receive a lump sum amount at the maturity of the policy after the term has expired. It can be used to fund one's retirement, children's education, or even to buy a house or support one's children's education.

In a life insurance endowment policy, the full sum assured is paid to the beneficiaries if the insurer dies during the policy term, or to the policyholder at maturity if the insured survives.

The benefit of an endowment plan is that it serves both life insurance needs and the need for savings of the individual. It is one of the traditional forms of life insurance available in the Indian market.

Basically, endowment policies are categorized into two types - with and without profit. Within each of these classes are many variations of plans structured to meet a variety of needs, including child education, retirement and whole life insurance.