Tips to Buy Best Endowment Plan
Updated On Aug 14, 2021
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From several insurance plan options available in the market, choosing the best plan depending upon your requirements becomes a strenuous task. One may choose an insurance plan that not just provides higher returns on investment but also offers other advantages like riders and insurance coverage. Amongst popular life insurance plans, one such name is endowment plan.
What is an Endowment Plan?
An endowment plan is a type of life insurance policy that offers the dual advantage of investment as well as insurance. These insurance plans provide life coverage, where a nominee is allowed to get sum assured in the event of death of a policyholder.
It is considered to be a great option for people who are seeking dual benefits of insurance coverage and wealth creation. You should keep the below mentioned points in mind at the time of buying an endowment plan.
Key Features of an Endowment PlanIt is an insurance plan that offers life coverage alongside an opportunity for regular savings over a particular time period so as to get the lump sum amount upon plan maturity. This maturity benefit can be used by an individual to meet several financial requirements such as retirement saving, child education, buying a house, etc. The policyholder can also avail tax benefit under this insurance plan.
Who Should Consider Purchasing Endowment Plan?An endowment plan can prove to be a good savings option for individuals who spend greatly without having any financial backup. Any person, who is looking for a plan to meet their long term financial requirements, can choose an endowment plan that offers a dual benefit of life cover as well as savings opportunities.
Why Should One Purchase an Endowment Plan?One of the significant reasons why an individual should purchase an endowment plan is that it offers them an opportunity to save their money in a disciplined manner in order to meet all their financial requirements. Also, the major benefit of buying this plan is that the insured individual receives life coverage alongside an opportunity to create a corpus for a financially safe future.
When Should One Buy an Endowment Plan?As per the financial requirements of an individual, one needs a risk free and assured environment. Thus, an endowment plan must be purchased to cover 3 areas i.e. protection and ensuring financial stability to one’s family members, achieving financial goals, and lastly in order to create savings to meet the investment objectives over a longer time period.
However, when a person is planning on buying a regular premium plan, one must buy it only when they have a steady income flow in order to pay regular premiums.
One must go for a simple and easy to comprehend insurance plan if they want to avail maximum benefits from it. In case you consider all the afore-mentioned points at the time of purchasing an endowment plan, then you can surely secure a good deal for yourself.
Also Read: Are Endowment Policies Tax-Free?
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.