The classic "buy term, invest the rest" comparison: a pure term plan (cheap cover, no maturity payout) plus investing the premium difference, versus an endowment plan (cover + guaranteed/bonus maturity payout).
This models the popular 'buy term, invest the rest' strategy: a cheap term insurance plan gives you high life cover at a low premium, while the money you save (compared to a pricier endowment plan premium) is invested separately to build wealth. It compares the resulting investment corpus against the endowment plan's quoted maturity payout.
This comparison focuses only on maturity value, not on the life cover amount — which is a critical part of the decision too. Term plans typically offer far higher life cover for the same premium compared to endowment plans, since endowment premiums are split between a smaller insurance component and a larger savings component.
Because term insurance is much cheaper per rupee of life cover than endowment or whole-life plans, the idea is to buy adequate pure protection cheaply, then invest the premium you save separately (in mutual funds, PPF, etc.) where it can often grow faster than an endowment plan's guaranteed + bonus returns.
Typically only a portion is guaranteed — many endowment plans include non-guaranteed bonuses that depend on the insurer's performance, and the illustrated maturity value you're quoted often assumes optimistic bonus rates that may not materialize.
No — it only compares the maturity/investment value. A fair full comparison should also weigh how much life cover each option gives your family, since term plans typically offer 10-20x more cover for a similar or lower premium.