Term vs Endowment Calculator Insurance Comparison India 2025
Compare term life insurance vs endowment plans. Calculate coverage, premiums, and investment returns to make the right choice for your family protection and financial goals.
Our Recommendation
Term + Investment
Term + Investment is highly recommended. Significantly higher returns expected.
Annual Premium Comparison
Maturity Value After 20 Years
Term Insurance Benefits
Endowment Benefits
Understanding the Basics
Term Insurance is pure life protection that pays your family if you die during the policy term. It offers high coverage at low cost but has no savings component. You pay premiums for the protection, but if you survive the policy term, you get nothing back.
Endowment Insurance combines life cover with savings. It pays your family if you die or returns money with bonuses if you survive the term. While endowment costs significantly more, it guarantees money back at the end of the policy term, making it attractive for those who want assured returns along with life protection.
Term vs Endowment: Key Differences
Understanding the fundamental differences between term and endowment plans
Term Life Insurance
Pure Protection
Only life cover, no savings
Low Premium
High coverage at affordable cost
No Maturity Benefit
Premium lost if you survive the term
Renewable & Convertible
Can extend or convert to permanent
Endowment Plans
Protection + Savings
Life cover with investment
High Premium
Lower coverage, higher cost
Maturity Benefit
Guaranteed return on survival
Lower Returns
4-6% returns typically
Which Plan Should You Choose?
Decision guide based on your financial goals and risk appetite
Choose Term Insurance If You
Need High Coverage
Want maximum protection at low cost
Are Investment Savvy
Can invest separately for better returns
Have Young Dependents
Income replacement is priority
Limited Budget
Want affordable comprehensive cover
Choose Endowment If You
Want Guaranteed Returns
Prefer assured money back
Are Risk Averse
Cannot handle market volatility
Lack Investment Discipline
Need forced savings mechanism
Want Tax Benefits
Both premium and maturity are tax-free
💡 Expert Recommendation
For most people, term insurance + separate mutual fund investment gives better returns than endowment plans. Term insurance provides 10-15x higher coverage for the same premium, while equity investments historically deliver 12-15% returns vs 4-6% in endowment plans.
Investment Returns Comparison
Term + Mutual Funds
Endowment Plans
20-Year Wealth Creation
Term vs Endowment Calculation Formulas
Understand the mathematical formulas used to compare term and endowment insurance policies.
Term Insurance Premium
Calculate term insurance premium for pure protection.
Term Premium = Coverage Amount × Term RateExample:
Coverage ₹1Cr, Term rate ₹8 per ₹1000
Variables:
Endowment Premium
Calculate endowment insurance premium with savings component.
Endowment Premium = Coverage Amount × Endowment RateExample:
Coverage ₹1Cr, Endowment rate ₹45 per ₹1000
Variables:
Investment Comparison
Compare term + investment vs endowment returns.
Term + Investment = Term Premium + (Difference × Investment Return)Example:
Term ₹80K, Difference ₹3.7L, Return 12%
Variables:
These formulas provide the mathematical foundation for the calculations. Actual results may vary based on rounding, compounding frequency, and specific lender policies.
Term vs Endowment Insurance FAQs
Everything you need to know about choosing between term and endowment life insurance plans
What's the main difference between term and endowment insurance?
The fundamental difference lies in their purpose and structure:
Term Insurance
- Pure life protection
- No savings component
- Low premium, high coverage
- No money back if you survive
Endowment Plan
- Protection + savings
- Investment component included
- Higher premium, lower coverage
- Maturity benefit if you survive
Which gives better returns - term insurance with separate investment or endowment?
Term insurance with separate investments typically provides better returns:
Example Calculation (₹50,000 annual budget)
Option 1: ₹1.5 Cr endowment plan - Premium: ₹50,000, Returns: 4-6% p.a.
Option 2: ₹1 Cr term + ₹40,000 mutual fund SIP - Returns: 10-12% p.a.
Result: Option 2 creates 2-3x more wealth over 20 years!
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