Important Things To Know About Endowment Plan
Published On Jun 23, 2021 3:00 PM By InsuranceDekho
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Endowment plans carry a reputation of maintaining a guarantee of risk-free returns, making them a popular choice among investors. They have been designed to ensure that you can save for your future along with providing the benefit of life cover to your family. Here are a few things you need to be familiar with before investing in an endowment plan.
Key Things You Must Know About Endowment Plans
Following are a few important things that you need to know about endowment plans:
Availability of Flexible Premium Payment Mode
Endowment plans function in a flexible mode regarding the premium. You may choose to pay your premium annually, semi-annually or monthly as per your convenience. The mode by which you want to continue in the future can also be changed on the anniversary of the policy.
Allows Flexibility of Payout
Endowment plans offer the option of receiving the sum assured as a lump sum or as part of the maturity proceeds, which indicates that a part can be accessed upon withdrawal and the remaining balance proceeds will be paid out as instalments over the period of time, as mentioned in the policy.
Endowment plans are often known for this feature. Such plans provide wealth creation during the policy tenure. On survival till the end of the policy term, the policyholder receives the assured sum with the additional bonuses (if any). The premiums paid are bound to return to the investor, making it a secure option to deal with contingencies.
Provides Maturity Benefit
Endowment plans fit the criteria of investors who do not seek the market thrill. The lack of involvement with risks ensures guaranteed returns to the policyholder after maturity term, or the nominated beneficiary in case of the untimely demise of the policyholder. The premiums paid remain secure from slipping through the security nets to the market frenzy, making it vulnerable with the tide of market conditions.
Provides Life Cover Benefit
Endowment plans extend a life cover in case of the untimely demise of the policyholder. The sum assured is returned to the beneficiaries/ nominees along with the bonuses (if any offered by the company). Since endowment plans function as a protection plan, in times of need the family of the policyholder is not subjected to a financial crisis.
Life Insurance plans in general are a great investment, but as it is clear from the above factors that investing in an endowment plan compounds the dual benefits of saving and insurance together, making it worthy of your money.
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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.