Term insurance and endowment plans are both called "life insurance," which is where the confusion usually starts. They solve different problems.
Term insurance: pure protection
A term plan pays a large sum assured only if the life insured passes away during the policy term. There is no maturity payout if you outlive the term. Because it carries no savings component, it buys the largest cover for the smallest premium — which is exactly the point when the goal is protecting dependants and outstanding liabilities.
Endowment: protection plus a savings component
An endowment plan combines a smaller life cover with a savings element, paying a maturity benefit if you survive the term. The premium is considerably higher for the same sum assured, and the savings portion typically grows at a modest, insurer-declared rate.
How to think about it
If the objective is replacing income for dependants, a term plan generally does that job more efficiently. If the objective is disciplined, guaranteed-feeling savings alongside a smaller cover, an endowment plan may fit — but it should not be compared to term insurance on cost alone, since they are not solving the same problem. Insurance is the subject matter of solicitation; policy issuance and terms rest solely with the insurer.
