Endowment policy..!!! what is an Endowment life insurance policy
Endowment policy You can do a lot with your savings — make a retirement plan, fulfill your children’s wishes, buy a dream home, and more. But it means finding a suitable saving tool that will help you achieve these goals. This is where endowment life insurance policy comes in. And the best part is that you can take the benefit of life cover while investing your premium for future savings fund.
An endowment policy helps you to develop a disciplined approach to a building & savings fund, as you regular contributes to this evidence over a long period.
Many of Different life insurance products and provide to different needs to financial goals. As a first-time endowment policy buyer, there are a few things to know about endowment insurance. If you are looking for a suitable saving plan, then this is a guide that can help you understand the endowment policy.
What is an Endowment plan?
An endowment plan is a type of insurance plan that provides long-term savings with fixed returns along with life insurance cover. Multiple policy buyers opt for the endowment plans if they want to save money for their future financial goals Endowment policy
Additionally, an endowment plan provides:
- A DEATH BENEFIT: In the event of accidental death of the policyholder before the expiry of the policy term, the sum assured (sum assured) and accumulated bonus2 (if any) are paid to the nominee/beneficiary.
- Survival Benefit: If the policyholder completes the term of the policy, they can get the sum assured as well as the accumulated bonus (if any) from the insurer.
Features and Benefits of Endowment Plan:
If you want to take advantage of the double benefit of life cover and long-term guaranteed1 returns in a single policy, then endowment plans are a good insurance policy.
- Death Benefit :+ Survival Benefit: Under endowment insurance, if the insured person dies prematurely, his beneficiary is entitled to the Sum Assured. However, if the policyholder completes the policy term, they get the saving corpus (plus bonus, if any) as maturity benefit.
- Choice of Premium Payment Frequency: The policyholder can choose the frequency of premium payment as per the policy chosen by him. Payment can be made on stain periods like monthly, quarterly, half-yearly or yearly basis.
- Convenience Cover: The coverage of the endowment plan can be extended or enhanced with the help of riders, such as total permanent disability, accidental death, critical illness, etc. If the policyholder feels that the coverage should be improved, these riders are included in the base plan.
Tax* Savings: As per the a applicable tax laws, the ploicy holders can available tax benefits on his endowment plan. The premium payment of the policy is eligible for tax benefit under Section 80C, while the maturity amount and payout of death benefit are eligible for tax benefit under the income tax act 1961 unde ther Sec 10 (10D)
How does an endowment policy work?
Endowment plans offer a combination of savings as well as insurance cover, which provides you life cover and also enables you to accumulate funds over a fixed period of time. For example, Tata AIA Life Insurance Guaranteed Return Insurance Plan Individual, Non-Linked, Non-Participating, Life Insurance Savings Plan (UIN: 110N152V11) also offers a joint life option where, under the whole life income benefit, the policyholder pays his Life cover for spouse can also be availed.
The tenure of a policys is a determined as per the terms and conditions of they policys On maturity, the insured person gets the sum assured (sum assured) and perhaps applicable bonus2. However, if the policyholder dies during the term of the policy, the sum assured (sum assured) and the applicable bonus go to his beneficiary.
Who should have an endowment plan?
Different types of insurance policies are useful for people with different needs, saving and investment goals, etc. A person will need an endowment policy if —
- They are interested in accumulating an assured financial corpus so that they can meet their fixed financial needs later.
- They want to get a lump sum amount of their savings at a predetermined time.
What should you look for before buying an endowment policy?
There are some easy parameters that can you helps the first-time policy buyer understand how to buy a latest endowment plan:
- Policyholder’s goals: Before buying an endowment plan, it is important to know your needs and financial goals, especially long-term goals. Since these plans give significant returns, if you want to meet financial goals like retirement planning, higher education of your child or their marriage, buying a new car, etc., they are very suitable for later years.
