5 Tips That Guide You to Purchase The Best Endowment Plan

In today's world of vast investment opportunities, a normal person is furnished with multiple policies and plans that help him in both saving money and securing his life and future. It has become a herculean task for a person to select the best plan that complies with his needs and interests. It is advisable to opt for a plan which provides high returns on investment along with insurance coverage and add on riders.

Endowment Policy is basically a life insurance policy which also provides a saving facility. After deciding the sum assured and the policy maturity period , the policyholder should pay a premium amount following a particular mode of payment among monthly, quarterly,half yearly and yearly periods or a one-time lump sum payment. Therefore, the endowment plan covers the life of the assured individual and also helps in promoting savings throughout the term of the Policy. The lump sum amount is paid after the maturity period along with the bonus(if any). In case, the person loses his/her life,before maturity date, the sum assured is paid to their nominees and further premium is not needed to be paid.

5 Tips That Help You in Buying the Best Endowment Plan

Are you interested in buying an endowment Policy? These points require your attention:

1. Know the Salient Features and Benefits of The Policy: This plan enables us to cover for our life along with saving for an unforeseen future. A lump sum of money is paid to the policyholder or the nominee, after the maturity of the policy. This amount can be used for children's education, marriage, or for purchasing properties.  Under Section 80C and (10D) of the income tax, the money invested in the endowment plan is free from any tax deductions.
2. Keep in Mind the Income of the Person: The income of the person acts as a vital factor in deciding the endowment plan. If the person has a steady flow of monthly income he/she can go for a regular pay endowment plan. To those with irregular income, there are flexible options and one-time payment plans.
3. Focus on Add-ons / Riders: As the name suggests, most of the insurance companies allow some additional benefits along with the assured sum to the policyholder. They include education endowment policy, marriage endowment policy or double action benefits etc. Additional riders towards critical illness or surgical assistance are also offered by some companies. However, they involve the policyholder to pay an additional amount to the premium for acquiring these benefits. 
4. Understand the Plan: Always select the plan which is simple to understand and comprehend. The two main classification of Endowment policy are Profit and nonprofit plans. Check various types of Endowment plans viz., endowment insurance policy, full endowment policy, low cost endowment policy, joint life endowment policy etc. Be aware of your necessities and capabilities before choosing the plan. Factors such as individual needs , age, risk aversion, current lifestyle , goals and intersectionality of the person are to be carefully considered before taking up the plan.
5. Research About the Company: Make sure that you conduct a thorough research on the insurer's financial position. Compare the premium rates of the plan with various other companies and choose the best premium that goes with your earning capacity. Also the customer service record, bonus rates should be checked with the other companies to get the best catch for you. 

Conclusion

There are numerous endowment plans offered by different renowned companies in the market . Don't be in a hurry to invest. Take your time and choose the best endowment plan that suits your circumstances and offer higher returns on the maturity of the policy . The  Assured sum almost remains to be the same in all the companies but what makes the difference is the bonus. So find a company that offers you a high bonus level. Understand the plan completely before taking a step ahead. 

Must Read: What Are Better Endowment Plans Or ULIPs?

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Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.