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Planning To Buy An Endowment Policy? Do You Know This?

Updated On Aug 12, 2021

Endowment plans are acquired for a set period of time, and the policyholder receives both life and death benefits. Policyholder retains the assured amount, plus earned bonuses (if any). Otherwise, the money is delivered to the plan's beneficiaries. There are many different viewpoints that investors hear before purchasing an endowment plan. An endowment plan is described in detail in this article to help you make a choice about whether or not to purchase one. 
What every investor should know about endowment plans is outlined in this article

Important Things To Know About Endowment Policy

Here is what everyone should about Endowment plans -

1. Endowment Plans Maturity Along With Death Benefits

Endowment plans are distinguished from other types of programmes by their dual benefit. With an endowment plan, you get the advantage of both saving and insurance all in one. When needed, the premiums deposited at regular intervals assist establishing a savings fund.

2. It Is A Risk-Free Alternative 

According to investors who are new to the insurance market, they believe that their money would be vulnerable to a variety of market dangers when it is invested in insurance plans 
Investing in endowment programmes offers investors security and a guaranteed payment. 
Risk-free returns are provided by these plans, which can be tailored to suit your risk appetite.

3. If You Have A Fluctuating Income, You Can Purchase Endowment Plans 

Endowment plans allow policyholders to set their own premium amounts. It's possible to pay premiums in accordance with your income level. Paying restricted premiums or a one-time premium is an option for those with sporadic income. 
Investing in endowment plans is inclusive and works effectively for people of all income levels.

4. Multiple Benefits Under One Plan

Additionally, endowment plans offer survivorship or maturity benefits. The Survival benefit kicks in when the policyholder outlives the maturity term and receives the sum promised as a result. This distinguishes an endowment plan from other insurance plans and protects the policyholder's financial security. 

5. Guarantees Security

This characteristic of endowment schemes is well-known. During the policy period, such policies create money. When a policyholder survives until the conclusion of the insurance term, he or she is entitled to the insured sum plus additional bonuses ( if any). In this way, it is a safe way to cope with contingencies.

6. Option for Long-Term Investment 

At the time of purchase, endowment plans are available for a specified term. 
In addition to providing coverage for a lengthy period of time, these plans will also allow you to build up a savings account over a period of time 

Take Away

Investors are confronted with a variety of different perspectives regarding insurance policies. As a result, it's important to understand the plan's major aspects. Prior to investing, you should be familiar with the key characteristics of endowment programmes, which have been discussed in the article above.

Must Read: How To Invest In Endowment Plans To Fulfill Your Financial Goals?

Who Should Buy An Endowment Policy?

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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