Features Of An Endowment Plan
Published On Mar 26, 2021 12:00 AM By Shrida Gulati
Table of Contents
An endowment policy is a combination of investment and life insurance. Under this plan the nominee is payable with a sum assured in case of an unfortunate demise of the life assured. This plan also offers maturity benefit, that is in case the life assured survives the entire policy term he/she will be provided with maturity benefit at the time of plan maturity. In addition to these benefits, this plan also offers guaranteed additions in a way of annual bonus declared upon the policy during the policy term as endowment plans are participating plans.
Endowment plans are considered one a great option for investment as this plan offers guaranteed additions, and lets you grow your corpus that can be accumulated to fulil future financial needs.
Read More: Top Benefits Of Buying An Endowment Policy
Features Of An Endowment Plan
Following are some of the key features of an endowment plan:
1. Serves Dual Purpose
Endowment plans are a type of life insurance plan which means the life assured will enjoy dual benefits of life insurance coverage and an investment option. With this plan you can ensure a financially secure future for yourself and your loved ones. You can grow your corpus to make sure you have enough financial resources to fulfil your future financial requirements.
2. Provides Death Benefit
As this plan is a combination of invest and life insurance, this plan offers life to the life assured. In case the life assured passes away during the policy term, the entire sum assured amount is provided to the nominee. This plan helps you ensure that your family members have financial resources to maintain their lifestyle even when you are not around.
Do Read: Best Endowment Plans in India 2021
3. Provides Maturity Benefits
This plan offers a maturity benefit to life assured. In case the life assured survives the entire policy term, a maturity benefit to the life assured. With the help of this plan you get the opportunity to to invest your money in the long run. This benefit will encourage you to have disciplined saving habits.
4. Offers Guaranteed Additions
Endowment plans are participating plans that means the insurance provider will declare annual additional bonuses on the insurance plan. Endowment plans offer guaranteed additions after the premium payment term ends. The guaranteed additions are provided along the death benefit in case the life assured passes away during the policy term or along the maturity benefit at the time of plan maturity.
5. Tax Benefits
The premiums paid towards a life insurance policy qualifies for tax exemption under the Section 80C of the Income Tax Act, 1961. The maturity amount receivable also qualifies for tax exemption under Section 10(10D) of the Income Tax Act, 1961.
Endowment plans provide life insurance along with an investment option. Under this plan the nominee is provided with a death benefit in case the life assured passes away during the policy term. In case the life assured survives the entire policy term he/she will get the maturity benefit. This plan offers guaranteed addition as it is a participating plan. Under this plan you can avail tax benefits also.
Must Check: 5 Things You Should Know Before Buying an Endowment Plan