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Why You Must Select An Endowment Plan For Your Retirement?

Updated On Nov 03, 2021

Endowment policies are a sort of life insurance that can also be used to save money. It allows you to put money aside on a monthly basis for a specified period of time in order to get a lump sum payment at plan maturity if the insured person lives longer than the policy's term. The insured person receives their guaranteed payment at a future period, according to the terms and circumstances of the policy.

While an endowment plan can provide you with many benefits at any age, buying one when you're young can provide you with even more. You should consider obtaining an endowment plan in your late twenties or early thirties. When you're young, you have fewer responsibilities than when you're in your mid-30s or early 40s, therefore you should always acquire an endowment plan. Aside from that, starting an endowment plan when you're young will help you create a corpus for the future while also providing financial stability to your family or loved ones. The final payoff for the mortality benefit and survival advantage of an endowment policy is higher and more uncommon than the benefits obtained in a traditional term plan such as a life insurance policy.

Why You Must Select An Endowment Plan For Your Retirement?

Below are a few reasons why you must select an Endowment plan for your retirement:

  • Tax Advantages

One of the most important qualities that make an endowment plan a smart investment option is that you can always enjoy tax exemptions on the purchase and payment of premiums.

Under sections 10 (10D) and 80C of the Indian Income Tax Act, 1961, the premium paid on endowment plans, as well as the maturity sum and ultimate payouts, are tax-free.

  • Moderate To Low Danger

This endowment plan, as per previous endowment patterns, is a safer and healthier investment alternative with relatively low risk. One of the primary reasons for endowment plans' medium risk is that they do not make investments in the share market or stock funds like equity funds. When your primary source of income ceases when you leave, a fund such as this will enable you to safely enjoy your well-earned retirement. Without fear or anxiety, you may continue to live independently and maintain your way of life. You'd never want to save cash or deprive yourself of the chance to achieve your goals. Whether you want to take your partner on a world vacation or buy your dream home in a hill station after you retire, an endowment plan can help you realize your goals.

  • Enhanced Investment Returns

In the event of the policyholder's sudden death, an endowment plan provides financial stability to the policyholder's dependents and loved ones, as well as helping to build a larger corpus for future needs. An endowment plan's returns on investment are significantly higher than a standard life insurance plan's, whether it's the mortality benefit or the survival benefit.

  • Flexibility In Coverage

Aside from typical endowment coverage, the insured individual can choose from a variety of add-ons and rider benefits on the basic plan, such as critical sickness coverage, accidental death benefits, or total and permanent disability coverage.

In addition, some endowment plans include a premium payment waiver or concession in the event of critical illness or total permanent incapacity.

  • Who Must Think About Buying The Plan?

If you are the family's sole breadwinner, an endowment plan is a must. Anyone who has a steady source of income and is responsible for raising their children and providing for their needs should consider purchasing an endowment policy.

If you are a regular wage worker or business executive, or if you are self-employed, you can purchase an endowment program. If you have the right endowment plan in place, you won't have had to risk a huge amount of money to get decent returns on your holdings.


Endowment plans have the ability to assist you in accumulating money for future needs in a disciplined manner. Furthermore, endowment plans are one of the safest investment options available, and many risk-averse individuals prefer to invest in them.

To protect your family, consider purchasing an endowment plan. You can quickly contact a reputable financial institution to purchase an endowment policy and submit an online application.

Also read - Best Endowment Plan in 2021

What Is An Endowment Plan And When Should You Buy It?

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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