5 Common Questions Asked About Endowment Plans
Published On Jan 31, 2022
Table of Contents
- Most Frequently Asked Endowment Plan Question
Endowment Plans are the most popular approach for people to guarantee their future in a more secure and trustworthy manner. It is a life insurance cum savings policy that lets you invest your hard-earned money wisely. It is available in both long and short term maturity and premium options. The best thing about an Endowment Plan is the flexibility it provides in terms of premium payment arrangements and policy lengths. Most people seeking for long-term and safe investments are hesitant to invest in Endowment Plans because they are unfamiliar with how they work and what they have to offer in comparison to other policies, and so miss out on a fantastic investment opportunity.
Most Frequently Asked Endowment Plan Question
Are you interested in learning more about an Endowment Plan but are unsure how it works? We've compiled a list of the ten most often asked questions about endowment plans so you can thoroughly examine your policies -
1. What Is The Main Distinction Between Term And Endowment Life Insurance?
Term plans are straightforward life insurance policies that offer no further benefits. Endowment plans, on the other hand, combine insurance and investing. As a result, if you live to the end of the policy term, you will get the corpus from the endowment insurance.
2. Is it true that endowment plans have higher premium rates?
This is because Endowment intends to pay you both the money insured and the interest if you live to the end of the policy's term. You may have to pay higher premium rates in order to earn a higher payout or benefit at maturity, so it's a good idea to think about your future needs ahead of time.
3. When Is It Time To Purchase An Endowment Plan?
Investing for your future is always a wise decision; you should invest in endowment plans early in your career when you have a consistent income stream, fewer liabilities, and the ability to save more and more so that you can both earn and save for your future needs.
4. What Are My Benefit Payment Options?
The policy benefits in Endowment Plans are only available in a lump amount upon the plan's maturity or the policyholder's death; in this event, the nominee receives the benefits.
5. Is There a Tax Break for Investing in Endowment Plans?
Yes, under Section 10(10D) of the Income Tax Act, you and/or your nominee, whichever is receiving the benefits, can receive tax exemptions on the plan proceeds. You can also claim a tax deduction of up to Rs. 1.5 lakh for premiums paid under the plan under Section 80C of the Act.
As a prudent investor, it's crucial that you understand the basics of your insurance plan. We've answered all of your questions about endowment plans in this post to assist you with the process. This article will answer all of your questions about purchasing an endowment plan. Measure all of your demands in terms of the programmes that are right for you, analyze your financial goals, and start saving and earning more right now!
You may also like: Know Why Endowment Plans Are Better Than ULIPs
Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.