What is an Endowment Insurance Plan?
Published On Jun 22, 2021
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Endowment plans are risk-free insurance plans that combine the benefit of saving to the basic concept of an insurance plan, providing them the structure of a dual objective, which helps them thrive among the investors.
An endowment plan also offers the survival benefit, according to which, the insurance company will release the assured sum to the policyholder even if the policyholder survives the maturity term. It is this feature, added with the fact that the beneficiaries/ nominees will receive the lump sum in case of an untimely demise of the policyholder, that makes the endowment plans a secure option.
It is a great option to pick if you are seeking the benefits of an insurance plan with a lack of a risk appetite.
Advantages of an Endowment Plan
Here are a couple advantages you will receive by investing in an endowment plan:
1. Stipulated Savings
Endowment plans are considered great for building a saving corpus for the future. The premiums are deposited at stipulated time intervals, encouraging savings habits that will bear fruit in the future.
2. Promise of Security
If you are someone who is not well suited to the idea of risk present in the market when it comes to investing, an endowment plan promises risk free returns. The investor's money will not be subjected to clutches of the market risk, ensuring safe returns.
3. Collateral Advantage
If the situation calls for an urgent need of money, it is possible to proceed with a loan against your endowment plan. The lack of a suitable collateral will not hinder the process of taking a loan during an emergency period. Therefore, it is well suited for times when you're struck with an emergency.
4. Premium Flexibility
Flexibility of premium is another benefit you could enjoy after signing up for an endowment plan. The premiums can be paid on a short-term or a long-term basis, well within your reach.
This feature is easy to grasp and implement based on your needs and your income.
Investing your money in an insurance plan can be a little intimidating, considering the variety of options available. While investing in an insurance plan might feel like a leap towards risk, without any security, an endowment plan offers a combination of benefits that will make you feel secure by promising guaranteed return and also offering the maturity benefit of receiving the money even if you survive the policy term. In this article, we have painted a definitive picture, explaining what an endowment plan is and why it is worth 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.