Are you a shopaholic? – Someone who finds it extremely hard to stop buying stuff that is not a necessity, to merely satisfy and quench your desires. To bring a halt to this behaviour of yours and to start saving money buy an Endowment Policy and lead a secured life!
Even though an Endowment Policy is a life insurance policy, it not only covers your life but also helps you save for a specific period of time. A lump sum amount is given to the policyholder on policy maturity if he/she succeeds in completing the policy term.
Under the Life Insurance Endowment Policy, the benefit of full sum assured is given to the beneficiaries even after the demise of the policyholder during the policy term or to the insured on maturity, if he/she survives during the policy term.
Thus Endowment Policy serves dual purposes; firstly, it provides you with life cover and secondly it helps you in saving your hard earned money. This is, in fact, the traditional forms of life insurance available in the Indian Insurance market.
Basics of buying endowment policies online:
One needs to be very vigilant while choosing the best-suited endowment policies. Given below are some of the features of the Endowment Policy you need to ponder over before buying the same.
- Death or survival benefits: The person gets the full sum assured if he/she survives the policy term. If he/she dies before completing it, the nominee or beneficiaries will be paid the whole amount.
- Premium payment frequency: The policyholder can go for regular, single or limited payments according to the chosen plan. This may be yearly, quarterly, half-yearly or monthly basis.
- Flexibility cover: The insured can add riders in between such as critical illness, total disability, accidental death, or an increase of their cover. Some insurers also provide a waiver for premium payment in case of critical illness or permanent disability.
- Low risk: An Endowment Policy is of low risk when compared to mutual funds or ULIPs, since the amounts are not invested directly into the stock market or equity funds.
- Higher returns: The Endowment Policy is of great help as it not only acts as a financial saviour for dependents or family members during the sudden demise of the insured, but also helps mould and build a corpus for the future. Be it a survival benefit or death benefit, the payouts are comparatively higher than that of a regular life insurance policy.
- Tax benefit: Under section 80C and Section 10D of the Income Tax Act, 1961 the policyholder can avail benefits in tax for maturity, premium and final death payout.
Steps to follow for Endowment Policy
The people who opt for the Endowment Policy are the ones who have a regular stream of earnings and are in the need of a lump sum amount after a certain period of time. If you’re really planning to buy an Endowment Policy then follow these steps for maximum benefit.
- Begin early planning: The ones who take up plans early in life are benefited with a huge sum at the end of the policy term. This also helps in disciplined savings owing to the power of compounding.
- Select and prioritize plans that offer riders. Additional benefits like marriage, education, double endowment policies etc exist.
- Review the flexibility option: If the policyholder is a regular salaried person, then he/she may choose a regular payment endowment policy. If irregularly salaried, then single payment option would do.
To those who need to ensure a goal based saving, taking up the Endowment Policy can be the best decision.
If the individuals look forward only for a life cover and not savings, then choosing Endowment Policy can prove expensive with policyholders finding it hard to pay the premiums regularly.
Like every other insurance policy, we have myriads of endowment policies to choose from and choosing the right one depends on many factors like current living style, future needs, income and risk factor. These policies can be a bit hard on the pocket, but you’ll definitely enjoy its huge benefits in the long run.
One should also check for the premium rates as they are comparatively expensive when compared to term plans. So a mistake committed, is likely to burn your pockets in the long run.
After comparing, try figuring out the company’s track record with respect to a bonus payment.
Other factors to be considered are the claim settlement ratio, customer service track and financial standing of the company.
Moreover, when you choose one, remember that simple is better than complex; explicit is better than implicit!
So choose wisely.