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How An Endowment Plans Can Help In Retirement Planning?

Updated On Sep 25, 2021

Purchasing an endowment policy is of great help if you are looking to generate for your future. If you choose to invest in an endowment policy today, then at the time of maturity of the plan you would have built a corpus to cushion your post retirement expenses. Under an endowment policy a death benefit shall be provided to the family of the life assured in case of an unforeseen demise of the life assured during the policy tenure. A maturity benefit shall be provided at the end of the policy tenure in case the life assured survives the entire policy tenure. This type of life insurance policy offers the benefit of wealth appreciation.

Endowment Plans for Retirement

Many people know endowment plans can provide financial protection to your loved ones, but what they don’t know is that an endowment plan could help a person save for their retirement. It is essential to know that investing in an endowment policy can help you generate monetary benefits at maturity, which can be used for several purposes like ensuring post-retirement independence, post-retirement daily expenses or fulfilling ambitious financial goals. Moreover, some endowment plans are designed to meet the needs of a life cover, post-retirement requirement, additional expenses etc. 

There are several benefits of investing in a retirement plan for retirement plan:

  • Endowment plans let you build a corpus over a certain period of time, which can be utilised in golden years of life. You will obtain a lump sum amount at the end of the policy term along with an accumulated bonus which can help you fulfill your daily expenses, medical expenses and ambitious financial goals in your post-retirement phase of your life. 
  • This plan will help you ensure financial security of your family in case of your absence. In case of your unforeseen demise during the policy term a death benefit shall be provided to the nominee/family of the life assured, which can help them fulfil their financial expenses and achieve their goals even in your absence. 
  • Endowment policies provide the benefit of wealth appreciation by declaring annual bonuses on the policy as these plans are participating. This plan participates in the profits of the life insurance company, according to the performance of the life insurance company. 
  • Under this policy you can avail tax exemptions upto Rs. 1.5 Lakh as premiums paid for an endowment policy are eligible for tax exemptions under the Section 80C and 10(10D) of Income Tax Act, 1961. 

To Conclude

If you have purchased a right endowment policy that fulfils your coverage requirement, you can expect a stress-free post retirement life. With the help of an endowment policy you can generate a corpus to live a financially independent post retirement life. 

You may also like to read - Planning To Buy An Endowment Policy? Here's What You Need To Know About It

What Are The Advantages Of Purchasing An Endowment Plan?

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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