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Why Selecting An Endowment Policy For Your Retirement Is Advised?

Published On Sep 18, 2021 10:00 AM By InsuranceDekho

The endowment fund of a life insurance policy is an agreement between an insured and an insurer that permits the policyholder's chosen beneficiary to receive a lump-sum payment after the insured passes away.

Moreover, all throughout the duration of endowment insurance, it provides a range of benefits to the policyholder and their family, including insurance coverage, tax deduction, and life coverage, to mention a few. As a consequence, your endowment insurance could be considered an income insurance policy.
Certain types of endowment plans provide a certain amount of money at regular periods based on the policy's stipulations, while others provide a big sum upon maturity. Let's take a look at how income protection insurance might assist you in retirement.

Reasons Why Selecting An Endowment Policy For Your Retirement Is Advised

Below are the reasons why selecting an Endowment Policy for your retirement is advised:

1. Guaranteed Income

Endowment insurance provides you with a source of income during your retirement years. In most situations, you will receive a lump sum endowment, or if you choose a guaranteed income plan, you will receive a guaranteed1 source of regular income as maturity benefits. This will assist you in meeting your medical and other routine expenses.

Must Read: Types Of Endowment Policies You Can Choose From

2. Tax Benefits

One of the most significant advantages of purchasing an endowment policy is that you will receive a tax benefit on both your premium and final withdrawals after maturity. Premature withdrawals from any financial plan, including a traditional endowment fund, are subject to penalties under Section 80C and Section 10(10D) of the Income Tax Act of 1961. Finally, you can receive up to $150,000 in tax benefits*, and most insured parties would not have to pay any tax if they withdraw the insurance only after it has matured. People who transfer endowment monies to their corporate organizations, real estate, or nominees are exempt from certain rules.

3. Secure Future

It will assist you in guaranteeing the future of your children, particularly if you are unable to be present. In the event that you, the policyholder, dies, your endowment fund is transferred to your beneficiaries. So, if you have the proper endowment insurance, and the important word here is "right," you may look forward to a stress-free post-retirement lifestyle.

4. Maturity Benefit

The insurance company will give you a monetary lump sum as a maturity bonus when your policy matures. Each form of endowment policy has a different maturity date. However, this is only achievable if the policyholder has paid their monthly or annual premiums on time. After receiving the maturity payment (or endowment), the insured individual can enjoy their retirement years without having to rely on family.

Please keep in mind that if the policyholder passes away during the payment schedule, their nominees will still receive the money promised.


The ULIP plan, like any other investment, will require your undivided attention and, of course, a piece of your hard-earned money in the form of premiums. As a result, it's critical to make the appropriate decision when looking back isn't an option. Receiving the highest potential profits for any investment objective is the most crucial factor to consider. ULIPs can be a good fit for investors with any risk profile and at any stage of their lives.

Also Read: Is Buying An Endowment Policy Really Beneficial?

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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