NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Life Insurance Products
In a traditional endowment plan, a policyholder who survives to the end of the policy term receives which of the following?
An endowment policyholder who survives the term receives the sum assured plus accrued bonuses, if any. Endowment plans combine protection with savings, so a maturity benefit is paid, unlike pure term plans, which pay nothing on survival.
- AOnly the premiums paid, without any bonus
- BThe sum assured along with accrued bonuses, if anyCorrect
- COnly the surrender value of the policy
- DNothing, because the cover ends with no payout
Explanation
An endowment plan pays a maturity benefit on survival to the end of the term. This equals the sum assured plus vested reversionary bonuses and any terminal bonus declared. A pure term plan would pay nothing on survival, which is why option D describes a different product.
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