How Endowment Plans Help To Meet Your Financial Goals?
Updated On Apr 22, 2021
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Although you may have a stable income in the present, the future remains largely uncertain. To ensure your financial stability and security in the future and your family’s financial sustainability, it is important to purchase an insurance plan. An insurance plan helps you achieve all of this and more, as it offers you protective financial cover against various mishaps. Insurance plans are available in many types and endowment plans are one such, popular type.
How Endowment Plans Help To Meet Your Financial Goals?
Endowment plans provide financial assistance on death (of the policyholder) or maturity (of the plan). They offer an avenue for disciplined financial savings that will benefit you later in life. Here is how endowment plans can help meet your financial goals.
1. Provides Disciplined Savings
As we have already mentioned, endowment plans are a great way to have a disciplined savings avenue while you are earning. It is easy to squander your earnings but the fruits of savings are always greater. You can put down regular premiums, which are affordable chunks so that they can be invested and saved up for a better financial future.
2. Guaranteed Financial Assistance to Family
The world and its happenings are more uncertain than ever. What is doable, however, is that your contribution to your family’s financial security for a time when you might not be there. Endowment plans payout a lump sum death benefit to the nominee on the death of the policyholder. It is of great help at a time when things may be in disarray and ensures you can provide for your loved ones even when you are not there.
3. Guaranteed Payouts
Endowment plans also provide maturity benefits. Once the policy matures and in case the policyholder is still alive, maturity benefits are paid out to them. This consists of the sum assured during the policy term and also, of guaranteed benefits depending on the company profits and how well the premiums were paid. Therefore, an endowment plan is not only useful in case of death, but also for financial sustainability in case you survive.
4. Loan Facilities
Having an endowment plan helps in getting loans, easier and faster. Getting a loan issued against an existing endowment policy is comparatively easier than without one. For starters, there is less scrutiny. You will also not have to keep any collaterals for your loan in case you have an endowment plan.
5. Tax Benefits
With an endowment plan, you can also avail of tax benefits. The exact benefits are to be found under Sections 80C and 10D of the Income Tax Act of India.
Conclusion
Therefore, there are multiple ways in which endowment plans can help you meet your financial goals. For further clarity on this matter, you must also consult your personal financial goals and requirements.
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