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WHY ENDOWMENT INSURANCE?
In today’s world, everyone is becoming tense about the security of their future hence the need for a comprehensive financial safety net that provides protection for your loved ones as well as a platform for saving money for future stability. Endowment insurance policies provide a solution that merges the best of both worlds.
An endowment insurance plan is a life insurance plan that offers life cover and helps you grow your money. It combines both protection and savings benefits. It can be used to save for various goals such as marriage, your child’s education, buying a house, starting a new venture and more.
It provides compensation for death, permanent disability, temporary loss of income due to disability from an accident, medical expenses and funeral expenses arising from an injury as a result of an accident, whether motor or otherwise.
The protection and maturity benefit you derive from an endowment plan will depend on a host of factors including the type of plan you pick, the sum assured, the age of the life insured and the length of the policy tenure.
Endowment policies provide financial protection for your loved ones in your absence, inculcates the discipline of regular savings to meet your future financial needs and helps accumulate a savings corpus to serve your long-term investment goals.
WHAT YOU NEED TO KNOW
What Are the Salient Features of An Endowment Plan?
An endowment policy not only provides life coverage or protection but also serves as a disciplined savings tool. By contributing regularly over a specific period, you can secure a lump-sum amount upon policy maturity. This sum can be utilized for diverse financial goals such as funding education, saving for retirement, buying a house, or covering marriage expenses. In the unfortunate event of the policyholder’s death, the beneficiary receives the full sum assured amount, ensuring financial protection for loved ones. Additionally, the endowment plan offers tax benefits. It provides goal- oriented savings and an option for a loan facility in case of emergencies.
Why Should You Buy an Endowment Plan?
Investing in an endowment plan is a wise choice due to its dual benefits. It offers disciplined savings for future financial needs while providing life coverage. Despite potentially lower returns, the plan boasts low investment-associated risks, making it ideal for risk-averse investors. Additionally, the endowment policy allows for tax benefits on returns, making it a preferable option. This plan not only ensures financial security through death benefits but also provides maturity benefits, making it a secure and attractive investment tool. These features make the endowment plan preferable for risk- averse investors as it also provides maturity benefit apart from death benefit offered to the nominee of the policy in case of an eventuality.
What is The Difference Between Endowment and Whole Life Insurance?
In whole life policy, there is no period of maturity as it is payable on death, but endowment policy has a maturity period. Rate of premium is low for whole life policy as compared to endowment policy. Premium is payable throughout the life for whole life policy while only for a specified period in endowment policy.
Who Should Consider Buying an Endowment Policy?
The endowment policy offers a smart savings solution for individuals who tend to spend freely without maintaining a financial safety net. It becomes particularly valuable when paying for your children’s education and post-retirement, ensuring a substantial amount is available when needed. Any individual, who wants to meet their long-term financial needs, can opt for an endowment plan that provides a dual benefit of life coverage along with saving opportunities.
What Are the Right Circumstances Of Purchasing An Endowment Plan?
To meet financial goals and ensure stability, you should opt for risk-free endowment plans. These plans serve three key purposes: safeguarding loved ones, achieving financial goals, and building savings for long-term investment objectives. Endowment plans are beneficial since they are long-term plans and provide better returns over a long period of time.
What Checklist Should One Keep in Mind While Buying Endowment Policy?
Selecting the right endowment plan involves considering factors like individual needs, income, life stage, and risk appetite. When contemplating a significant investment, comparing quotes beforehand is essential. By examining premium rates and company track records, you can make an informed choice. While endowment plans typically offer lower returns, they are considered safer in the long run. Understanding bonus amounts and checking customer service, claim settlement ratio, and financial stability are crucial for a well-rounded decision. Ensure your investment aligns with your goals and is backed by a reliable insurance provider.