5 Things to Consider When Buying Endowment Policy
Updated On Jul 12, 2022
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An endowment plan is a bundled product which provides both investment returns and protection coverage. It can help you grow a nest egg for any future goals you may have, such as paying for your child’s university fees or even building a corpus of funds to retire well. Endowment plans provide death coverage. For most plans, they cover total permanent disability and some cover major illnesses.
Now, if you are new to endowment plans, there is probably a lot that you do not yet know. To help you gain a better understanding of this product, here are 5 things to keep in mind when buying endowment plans in India.
Things To Keep In Mind While Buying An Endowment Policy
1. There Are Two Types Of Premium Terms
You can opt for either a single premium or a regular premium endowment plan. With a single premium plan, you pay a lump sum premium at one go when you buy your plan. With a regular premium endowment plan, you make regular payments over the premium payment term of the plan. You may also choose to finish paying your regular premiums before the plan matures.
2. Capital Guaranteed Upon Maturity
It makes sense to only put your money where you feel it is secure. Insurers understand this concern. Some insurance companies will guarantee to pay back the total premiums paid upon maturity. Keep this point in mind when considering your options available.
3. Choose policy term as per financial goals
Endowment plans come with a wide range of policy terms. You can choose an endowment plan with a short or longer policy term, depending on your goals and needs. Customise your policy term so that it coincides with the goal you are saving up for. For instance, if you are saving up to buy a new home in about 10 years, you might want to select the term of 10 years for your endowment plan. You can even opt for a plan where the premium payment term is shorter than the policy term if you would prefer to complete your premium payments earlier.
4. You Can Add Supplementary Benefits
You can add supplementary benefits to enhance the coverage you receive from your endowment plan. For instance, you may opt for a supplementary benefit that waives premiums in case you are diagnosed with a critical illness. Make sure to ask your insurance provider for a full list of their supplementary benefits so that you can choose the most suitable one(s).
5. You can now buy or get an instant quote online
Leading insurance companies in Singapore can now give you an instant quote for your endowment plan on their website. You just need to provide some information and select your plan to get a quote. If you are happy with the quote you receive, you can go ahead and make your purchase on the spot too, all online!
Conclusion
Do speak with a Financial Consultant for help in selecting the right endowment plan for yourself. Hope that this has been an insightful read for you. This information will help you make an informed decision.
Also read: Endowment Plans: Insurance Plus Savings
