Few Things To Keep In Mind Before Purchasing An Endowment Policy
Published On Mar 05, 2022 10:00 AM By InsuranceDekho
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You must assess your goals, requirements, investment aim, and other factors before choosing the plan that best meets your objectives. An endowment plan is necessary because it ensures the financial security of your family once you retire. It enables you to save for your child's education, your marriage, and the purchase of your dream home. A fundamental investment strategy is no longer sufficient in today's society. People are increasingly looking for a policy that combines the benefits of both an investment and a savings plan. Endowment plans may be useful in this situation. In this essay, we'll take a closer look at endowment plans.
Things To Consider Before Purchasing A Money Back Plan
The following are some of the benefits of endowment programmes. Continue reading to find out if an Endowment Plan is right for you.
1. Investing for the Long Run
While Endowment Plans may not offer the best returns when compared to other pure investment products like Mutual Funds and the like, they do assist in the development of a Long-Term Corpus. In reality, it benefits many people by forcing them to save.
2. Coverage And Investment
As previously stated, an Endowment Plan provides life insurance as well as the flexibility to invest in a variety of securities. As a result, you will get a considerable sum of money upon your death or the maturity of the insurance, whichever comes first.
3. Take Advantage of Taxes
Like most other types of insurance, endowment plans provide a twofold tax benefit. Because the Sum Assured in a Traditional Endowment Plan is always more than 10 times the premium paid, the premium invested in this plan is tax-free up to Rs 1 lac per year under section 80C, and the Maturity Benefit is tax-free under section 10(10)D. As a result, in this case, the new IRDA guidelines are irrelevant.
An endowment policy can be used to finance a loan. Because they are long-term plans with a bigger amount of money guaranteed, endowment plan loans are generally offered.
5. As a Fund
People who want to put money aside for a specific reason and then use it later will benefit from an endowment plan. Endowment Plans are popular among retirees because the money is guaranteed to be paid out when they retire. Some investors save aside money for a major life event, such as a child's wedding or college tuition. As a result, an endowment plan is ideal if you are employed.
An endowment plan is a type of insurance that combines the advantages of both insurance and saving. You can save consistently and receive a lump-sum payment when the coverage expires with this sort of insurance plan. You will receive an assured sum at the end of the insurance term, based on the terms and circumstances indicated. In the event of your death, the insurance company will pay the guaranteed amount, plus any earned bonus, to the nominee selected in the policy (if any).
Also Read: Features And Benefits Of Endowment Plans
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.