Maturity Benefits Of Endowment Plans
Table of Contents
The maturity benefit is a lump-sum payment made by the insurance provider when the policy has reached its expiration date. It simply implies that if your insurance policy has a 15-year term, you, the insured, will get a payout at the end of those 15 years. Generally, the maturity amount meaning refers to the sum of the premiums paid upto that time and the additional benefits which the insurance company chooses to give to the policyholder. You will only be eligible for this if you have paid all of your premiums and finished the term. Furthermore, a maturity benefit policy covers the risk of mortality. It safeguards your family's future in the case of a mishap leading to loss of life of the insured.
Linked endowment plans are a mix of investment and insurance in most cases. The guaranteed amount is not particularly large in this case. Funds are invested in debt funds, which means that the returns are lower risk and more reliable. However, in traditional non- linked endowment policies, a sum assured amount is paid as lump- sum to the policyholder as maturity benefit, or to the beneficiary as death benefit.
Benefits of Endowment Plan
- Provides Insurance Cover: An endowment policy provides insurance cover during the policy term.
- Lump sum payout: It provides a lump sum payout when the policy matures (i.e. at the end of the policy term)
- Serves with a dual purpose: An endowment policy serves you with a dual purpose as it not only works as an insurance policy but also offers you with long term investment benefit.
- Provides you with a Tax Benefit: You are entitled to get tax exemption on both premium payments, maturity and final payouts under the Section 80C and Section 10(10D) of the Income Tax Act, 1961.
- Offers Low-Risk Investments: When it comes to investing, endowment policies are considered as a relatively safer option than other types of investments.
- Offers Long-term savings: An endowment policy offers long term savings. You can choose a policy term ranging from 10, 15, 20, 30 to 40 years.
- Provides option to add riders: With Endowment policies, you get an option to enhance your policy by opting for additional riders like critical illnesses, waiver of premium, family income benefit, accidental death benefit, and accidental permanent total / partial disability benefit.
- Additional Bonuses: Insurance companies also declare bonuses. Here, the bonus is the extra amount of money added to the proceeds, which is distributed to a policyholder by an insurer.
Conclusion
If you have all of the necessary documents, settling the types of maturity claims will be a simple process. It's critical to use the maturity advantages carefully once you've received your claim. Choose an appropriate endowment insurance plan based on your present position or life stage to ensure that you and your family have protection in the case of an unforeseen incident. Life insurance may serve as more than a safety net for your loved ones. Maturity benefits might give substantial financial assistance and come in useful when you want to achieve your goals in life.
Also read: Claim Process For Endowment Plans
