All About Endowment Life Insurance Plans
Updated On Apr 22, 2021
Table of Contents
- What Is an Endowment Life Insurance Plan?
- Why Do You Need an Endowment Life Insurance Plan?
- What Are Some of The Features of The Endowment Life Insurance Plan?
- Who Should Buy an Endowment Life Insurance Plan?
- What Should You Keep in Mind Before Purchasing an Endowment Life Insurance Plan?
What Is an Endowment Life Insurance Plan?
An endowment plan is a life insurance plan which ensures life cover as well as promotes savings and investment. So, any life insurance policy with the dual component of savings and life cover can be termed as an endowment policy. So, if you have subscribed to an endowment life insurance plan, you can save constantly over a specific period of time so when your policy has matured, you get a handsome amount in case you survive the terms of the police. On the other hand, if you die, the full matured sum is paid to the beneficiary that you have nominated if he/she meets all the terms and conditions of the endowment policy.
Also Read:- Best Endowment Plans in India 2021
Why Do You Need an Endowment Life Insurance Plan?
As we can see, the advantage of an endowment life insurance plan is the dual role it plays – as a life insurer and as a medium for investment. Every year you put a specific amount of money as an investment to your savings account and a part of it is deducted to buy your insurance plan and the rest is converted into an investment fund. This investment fund increases with time and as the policy meets the maturity period, you get a large sum of money at the end which you can use for your children’s education and marriage. But who knows when a mishap can happen and death can knock at your doors? Who will look after your family thereafter?
The answer is the endowment life insurance plan. The money that you have been saving will go to the beneficiary of your insurance policy when the policy matures and the person survives the terms of the policy. Endowment life insurance plans are most commonly purchased for retirement plans, education and college goals, marriage, and other long-term goals.
What Are Some of The Features of The Endowment Life Insurance Plan?
Following are some of the features of an Endowment Life Insurance Plan:
- An endowment life insurance plan may or may not include or guarantee profits. The ones that do will increase your investment funds to manifolds.
- The insured gets dual benefits of savings through investment and life cover.
- An endowment life insurance plan is tax-free. So, your returns are higher!
- There are zero risks in the functioning of an endowment life insurance plan as it is not dependent on markets. Moreover, as long as you pay all your premiums timely, you will get all our benefits to rest assured.
Who Should Buy an Endowment Life Insurance Plan?
Below mentioned are categories of people who can purchase an Endowment Life Insurance Plan:
- Anyone who is seeking a low-budget insurance plan with a low amount of money to save as premium.
- Anyone who is seeking a risk-free and beneficial plan that works not only as a life cover but also as an investment plan.
- Anyone who is seeking an insurance plan with tax benefits.
- Anyone who has retirement plans, education goals, marriage expenses and other non-negotiable life goals to meet.
What Should You Keep in Mind Before Purchasing an Endowment Life Insurance Plan?
Following are some important factors that you must keep in mind before purchasing an Endowment Life Insurance Plan:
- The amount to be deposited for saving or the premium should be affordable. Lower premium amounts will not affect other external financial requirements that you need to meet.
- Profits or extra benefits may be one criterion for choosing an endowment life insurance plan. You may choose a plan that is offering you additional profits at the end of each policy year. So, by the time your plan matures, you end up with a huge sum of money.
- Ease of claim settlement is another very important lookout before buying an endowment life insurance plan. You should research on the insurer you are planning to opt for. See if their process for settling claims is easy and customer-friendly. Online services for the same and easy reporting at nearby branches must be kept in mind.
You May Also Like to Read:- Mistakes You Can Avoid While Purchasing An Endowment Plan
If you are someone who is looking for a durable and beneficial insurance plan at low cost, you may consider an endowment life insurance plan as a foolproof plan. Think wisely before making the decision to purchase an Endowment Life Insurance Plan