An endowment insurance plan covers your family when some dies in your family. Like term life insurance, if you survive the period of the endowment insurance plan, the lump sum is given back to you sometimes with a bonus or without the bonus.
Endowment is traditional procedure of insurance plan. In endowment insurance plans your premium is created on your sum assured/risk insurance coverage that you select under the policy.
It can give you great amount when you have critical illness.
Typical maturities are ten, fifteen or twenty years up to a some age limit. Some policies also pay out in the case of critical illness.
It is for some specific time or death case. A Good maturity amount you will get or your family will get. Family endowment at age 85 will be beneficial for your family and older citizens.
Benefits of Endowment plan:
1. Death Benefits
2. Goal Based Savings
3. Tax Benefits
4. Additional Benefits
Types of endowment Plans
1. With profit endowments
2. Low cost endowments
3. Low start endowments
4. Unit Linked Endowments
Some of the features that make endowment plans profitable are:
- High liquidity
- Profits are earned on a compounding basis
- Tax benefits on payable premiums under Section 80C
- Dual benefits of savings and investment
- Revenues received at maturity are tax relieved under Section 10D
- Benefit for a loan against the policy
Why Should we buy endowment life insurance?
Usually, there are two important reasons for buying endowment insurance plans.
There are two important reasons to buy endowment insurance basically:
- To get tax benefits under Section 80C and 10(10D) along with life protection and risk-free saving/investment
- To form a second retirement endowment or for any other long-term good goals.
How would you explain a 20 year endowment life insurance policy?
“Endowment” means that the money value equals the early death advantage and is used to define what occurs with a whole life insurance.
All whole life policies must award. Dividends and Paid up Additions can add to the entire value, but the base rule just awards.
A 20 year endowment policy awards at the end of 20 years.
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