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Five Advantages Of Buying An Endowment Policy.

Published On Mar 13, 2022

Endowment plans are insurance plans that provide guaranteed benefits in the form of a total sum assured as well as different bonuses to the policyholder at the maturity of the plan's term or to the policy holder's nominee(s) in the event of her/his death before the term maturity. Endowment plans are essentially insurance vehicles that also provide the investor with a savings option. An endowment plan provides principal plan benefits, such as an amount assured to the policy holder's nominee(s) in the event of the policy holder's death during the policy term, and also entitles the policyholder to maturity bonuses if she/he survives the policy period.

Top 5 Benefits of Purchasing an Endowment Policy

The following are the top five benefits of purchasing an Endowment policy:

1. Maturity Benefits And Death Benefits

An endowment plan is a one-of-a-kind investment choice since it promises you advantages as a maturity benefit if you survive to the policy's expiration date. Furthermore, if you die during the duration of the policy, your nominee will receive the sum guaranteed, as well as other benefits, as a death benefit. In this case, endowment plans give both death and maturity benefits.

2. Coverage Flexibility

An endowment plan allows you to have variable coverage. You can put on extra benefits such as rider benefits such as accidental death and disability, critical sickness, and so on. If these riders were included to your Endowment policy, its scope would become far more flexible. However, it would result in a little increase in the policy's premium.

3. Premium payments

Endowment Plan providers usually provide various payment options for premium payments. You are free to pay your coverage premiums whenever it is convenient for you. The premium payment frequency might be monthly, quarterly, or even a one-time payment of a lump sum amount.

4. Bonus

Because the option of further bonuses is available, the real maturity benefit of an Endowment plan would be more than any other normal life insurance policy without the bonus. The advantages are enhanced since, in addition to the sum promised, a number of other reimbursable sums are available.

5. Tax Advantages

Endowment insurance provides tax benefits since the premium is deductible under Section 80C of the Income Tax Act of 1961. Endowment plan maturity benefits are also tax-deductible under section 10(10D) of the Income Tax Act of 1961 if the sum pledged is at least ten times the yearly premium. Furthermore, even if Endowment programs offer significant returns, incentives, and other advantages, the gains are not inflation-adjusted. Because endowment plans are purchased over a long period of time, there is a risk that the ultimate return delivered after the policy term may be depreciated due to inflation.


Endowment policies, in addition to these core characteristics, allow you to convert the insurance to a paid-up policy. You can also use your Endowment insurance as collateral for a loan. However, in order to obtain these benefits, you must pay the insurance premium for a set length of time, and you should check with your insurer to see if your policy includes this option. As a result, before acquiring Endowment insurance to meet your personal financial goals, you must first understand its important aspects, such as the breadth of coverage, perks, and so on.

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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