Top Benefits Of Buying An Endowment Policy

An endowment policy is a great advantage to have in one's life. If you have an endowment plan, you can rest easy about the financial obligations of your future. Moreover, an endowment plan also ensures you get protective cover from the many uncertainties of daily life. 

Under an endowment policy, the policyholder pays a premium amount regularly which is invested and saved up. The returns from this insurance plan are in the form of two benefits, death or maturity. They are both paid out in lump-sum as has been accrued. There are several benefits offered by an endowment plan.

Also Read:- Features Of An Endowment Plan

Top 5 Benefits of An Endowment Policy

If you are wondering why you should purchase an endowment policy, take a look at its benefits. Here are the top 5 benefits of an endowment policy.

1. Compounded Returns

Endowment policies are popular for their relatively higher returns. This is because the premium amount from the policyholder gets compounded under an endowment plan.

2. Guaranteed Bonuses

An endowment plan pays out guaranteed bonuses at the time of maturity or on the death of the policyholder. All bonuses that have been accumulated till that time is given out to the policyholder (or nominee, in case of death benefit) in addition to the regular benefit amounts.

3. Low Risks

Endowment policies have low to negligible risks attached to them. This makes them safe investment choices with assured returns and savings.

4. Riders

You can add riders to your basic endowment plan from a variety of options. There are riders available for critical illnesses, accidental deaths, disabilities and more. These riders help in enhancing your basic endowment plan.

5. Added Benefits

Endowment policies provide added benefits that are paid out when the plan matures. On maturity of the plan, not only do you get the sum assured but also a lump sum maturity benefit amount.

6. Flexibility 

Endowment plans offer great flexibility in terms of premium payment. The policyholder can pay them monthly, quarterly, semi-annually or annually. This choice helps the policyholder maintain the policy at their own pace and capabilities. 

7. Tax Benefits

Under the Income Tax Act of India, there are two kinds of tax benefits applicable to endowment policies. These benefits can be found under Sections 80C and 10D of the Act.

8. Loan Facility

If you have an existing endowment plan, it is easier to get loans against it. You can apply for a loan as and when needed. Not only does the application undergo less scrutiny, but you also do not have to keep any collateral. 

You May Also Like to Read:- Things to Consider Before Purchasing an Endowment Plan

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Conclusion

As you can see, there are several benefits to an endowment plan. They are great advantages in general. If they also match your financial goals, do not hesitate to buy an endowment plan as soon as possible.