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Common Features of Endowment Insurance Plans

Updated On Jul 10, 2021

Endowment plans are offered by several companies. In most cases, these companies add additional features to make the plan more appealing in comparison. The plan's essential character, however, remains unchanged. As an investor, you should be aware of the fundamental components of an endowment plan. We've gathered a list of the most common elements of an endowment Insurance plan in this article.

Common Features of Endowment Insurance Plans

Some of the most typical features of an endowment Insurance plan are listed below.

  • Maturity And Death Benefits

If the policyholder survives the maturity term, the policyholder is guaranteed the sum assured plus any collected bonuses. The Maturity Benefit is comprised of the following components: 

  1. Sum Assured at Maturity, plus 
  2. Accrued Reversionary Bonus (if any)
  3. Terminal Bonus (if any)

In the event that the life assured is lost, the specified beneficiaries are paid the sum assured plus bonuses.As a result, endowment plans provide investors with both survival and death benefits.

In the tragic event that the life insured passes away during the plan's term, the nominee will receive the following:

  1. Sum Assured in the Event of Death
  2. Bonuses accumulated as of date of the death.
  • Additional Bonuses 

Endowment plans allow for the accumulation of wealth through bonus increments.These collected bonuses are given out simultaneously with payouts, ensuring that the policyholder receives a higher return.

  • Customised Protection Through Riders

Riders are extremely important to prepare for further contingency.They are extremely cost-effective, and they can save you money by avoiding the expense of acquiring multiple plans for different requirements. Investors can select from the following riders while buying an endowment plan:

  1. Accidental Death Benefit Rider
  2. Life Guardian Benefit Rider
  3. Waiver of Premium
  4. Critical Illness Benefit Rider
  5. Accidental Total And Permanent Disability Benefit Rider
  • Policy Loan

Policyholders with endowment plans can choose to avail a loan against their policy. This function may take some time to activate in some plans, and interest will be levied on the outstanding loan at the company's current interest rate.

If the policy matures during the loan period, the company has the right to deduct the remaining loan amount along with all outstanding charges.

  • Saving Benefit

Endowment programmes motivate investors to save and keep their accounts active over time. Such plans assist in securing the premium as a savings account that can be accessed when needed. The saving corpus runs smoothly as long as the premium is paid on time, as specified in the policy.

  • Flexibility of Premium Paying Term

In terms of the premium, endowment plans operate in a flexible fashion. Depending on your preferences, you can pay your premium annually, semi-annually, or monthly. On the anniversary of the policy, you can also modify the mode through which you want to continue in the future.

Take Away

An endowment plan is the best alternative if you're looking for a plan that will provide you with assured returns as well as a tax benefit. It is an appropriate policy for people of all ages and savings capacities. The information in the preceding article will help you gain a better grasp of the characteristics of an endowment plan, allowing you to make the best option possible regarding your insurance policy coverage.

Also read 

What Is The Maximum Age To Buy Cover In Endowment Insurance?

Which are the Best Endowment Insurance Plans In India in 2021?

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.                            

 

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