Insurance Awareness - Life Insurance - LIC
Which of the following is a key feature that differentiates Endowment Plans from Term Insurance policies?
Which of the following is a key feature that differentiates Endowment Plans from Term Insurance policies?
medium Q5 of 15
Step-by-Step Solution
Step 1: Compare policy features
Endowment Plans combine insurance protection with savings and pay maturity benefits; Term Insurance offers pure risk cover without maturity benefits.Step 2: Evaluate options
Endowment Plans provide only death benefit; Term Insurance provides death and maturity benefits. is incorrect as Term Insurance does not provide maturity benefits; Both Endowment and Term Insurance provide periodic survival benefits during the policy term. is wrong as only Money-back policies provide periodic survival benefits; Term Insurance policies invest premiums in market-linked funds; Endowment Plans do not. incorrectly attributes market-linked investment to Term Insurance instead of ULIPs.Final Answer:
Endowment Plans combine insurance with savings; Term Insurance provides pure risk cover without maturity benefit. → Option DQuick Check:
This distinction is fundamental and widely tested, confirming the answer.
Quick Trick: Endowment = insurance + savings; Term = pure risk cover.
Common Mistakes:
MISTAKES- Mixing up maturity benefits and survival benefits between policy types.
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