When Should You Purchase An Endowment Plan?
Updated On Apr 26, 2021
Table of Contents
What is An Endowment Plan?
Endowments plans is a type of life insurance plan which combines two benefits that are life cover and investment options. If the life assured passes away during, the nominee will receive the entire sum assured in such case. This plan also provides a maturity benefit, that is the life assured will receive a maturity benefit if he/she survives the entire policy term.This maturity benefit amount can be accumulated to fulfil different financial needs at different stages of such as financing retirement, education for children and/or marriage, or buying a home.
Before purchasing an endowment plan you must know what is the right time and what are the right conditions under which you should choose to invest in an endowment plan.
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When Should You Purchase An Endowment Plan?
Endowment plan not only provides life cover also provides an investment opportunity. This plan is a participating plan wherein the insurance provider will declare annual bonuses upon the endowment plan. So the death benefit and additional benefits will be paid out along the additional bonuses.
It is advised to invest in an endowment plan as soons as you start earning and you have a steady flow of income. Steady flow of income of a person will help in making regular premium payments. Endowment plan is ideal for a person who has a steady flow of income and wants to secure themselves and their family members' future.
Endowment plans encourage long-term savings, so it is advised that as soon as a person starts earning and has a steady flow of income to make sure he/she can make regular premium payment, he/she should invest their money in an endowment plan. Though returns from endowment plans are not high but they are risk free, the longer a person keeps investing in an endowment plan the better returns they will receive.
Conclusion
As soon as you start having a steady flow of income and you think you can make regular premium payment you should start thinking about investing in an endowment plan because endowment plans are a long term savings plans, where in the longer you stay invested, the insurance provider will keep declaring an annual bonus upon the insurance plan. The additional bonus will help you overcome your financial requirements at different stages in your life. In addition to that in case of an eventuality your family will be provided a sum assured to maintain a healthy lifestyle. If you start investing early in an endowment plan you will enjoy the benefits of life insurance and you will be able to invest for a financially secured future for yourself and your family.
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