Endowment Plans And Its Benefits

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Endowment Plans And Its Benefits
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• Many people especially young working generation
  prefers to purchase an insurance cum investment
  plan, and endowment policies 'become the best
  solution for these people. These insurance types
  where the premium amount paid to the insurance
  company is partly used for protecting
  policyholders life and remaining part used for
  the purpose of investment to support you building
  a corpus at the stage of retirement.
• In simple words, endowment policies provide
  triple benefit of investment, insurance tax
  savings. It is a structured product which is a
  combination of investment insurance.

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• Declaration Bonus
• It may declare bonus annually and is usually
  mentioned as a percentage of total sum assured.
  This bonus declared is paid out of the returns
  made by the endowment insurance over a time
  period. Normally, the percentage of bonus paid is
  depend on a plan and the respective insurance
  company.
• Survival Benefits
• If the demise of policy owner occurs during the
  valid term of policy, then his/her dependents
  will get the sum assured. In case, insured person
  survives till the maturity date, then
  policyholder will be eligible to get the sum
  assured plus the accumulated bonus till the
  maturity date. The maturity period varies from
  company to company.

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• The demand of endowment policy in India is
  increasing day by day. It is necessary for you to
  know that bonus may not declare after every year.
  Many companies prefer to accumulate annual bonus
  and paying it on the maturity date rather than
  giving it every year.
• The bonus when paid under this product is not
  annually compounded that affects the returns in
  the long run. It is the best option for young
  people who cannot save more money as they may
  have some other priorities.
• These products have always been around but as
  they are long term, so they are considered as
  investment insurance, more than savings. Due to
  its flexibility, it meets the two goals of wealth
  accumulation protection at the same time. This
  plan do not contain interest rate risk and
  investment risk.
•  Unlike many insurance schemes, customer dont
  need to submit a medical report to qualify for
  this plan. As compared term insurance, it is
  quite expensive but still this product is worth
  it. But, buyer wont get all the benefits if
  he/she dont pay their full premium amount, and
  if policyholder stop paying his/her premiums,
  then automatically the insurance will lapse.

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