Endowment life insurance is provided under an agreement to pay the sum assured if the insured is living at the end of the period of insurance, or a death benefit of the same amount if he/she dies with in that same period. If the insured is alive on maturity, i.e. after 10 or 15 years, the insured himself will collect the sum assured.
If the insured dies with in policy period, his/her beneficiaries will collect the sum assured. If payment of premium ceases after at least two years’ premium has been paid, free paid-up policy for a reduced sum assured will be automatically secured. Furthermore, after two years’ premium payment there is an option to borrow up to 90% of cash value.