Things To Consider Before Buying An Endowment Plan

The market is full of lucrative offers and policies to invest money into but if you are someone who invests money without many prior speculations, you can consider investing in an Endowment Plan. It not only covers your life as a policyholder but also helps you earn and save over the years with its flexible maturity benefit payout and premium payment options. 

An Endowment Plan is a life insurance cum savings policy that caters to all your long term to short term financial needs. It is a stable and well-planned route for individuals who know that they would need a specific amount after a certain period of time for funding their child’s education or marriage, retirement, health needs etc. If you are thinking of investing your money for future financial needs, an Endowment Plan would be the best area to invest in given how safe and profitable it is. 

Things To Consider Before Buying An Endowment Plan 

Before investing your hard-earned money into an Endowment Plan, have a look at the important things you should consider before buying one-

Analyse Your Financial Requirements

The first step before buying an Endowment Plan is analyzing your financial requirements. It starts with analyzing your income, investments and savings with respect to your current needs and finance needs in the later phases of life. If you are earning well, don’t have a lot of liabilities and want to secure more for your future you may choose a plan with a higher premium and greater return on investment while if you’re in the mid-stage of your life, you can invest judiciously to plan for your retirement and health needs. 

Recognize The Right Plan For You

When you’re done with analyzing your needs 10 to 15 years from now, you can start looking for Endowment Plans for you. You should begin with searching how you can optimize your investments, you can choose your payment tenure. For eg. If you're a regular salaried employee, you can choose a monthly payment option, if you’re a businessman dealing with profits and losses, you can choose to pay quarterly or half-yearly. You can also choose your plan’s maturity (5 years, 15 years) as per your needs so that you have a secure future.

Background Check Of The Insurance Company

After choosing the Endowment Plan that suits your requirements, you must do the regular background check of your insurance company like you would do for any other insurance plan. Look for a company that is financially stable and has a  higher Claim Settlement Ratio and a healthy relationship with its customers, check for past disputes and conflicts. Do a similar background check for your agent as well as they would be the one dealing directly with your policy. 

Policy Loans And Policy Withdrawal Benefits

The facility of policy loans and policy withdrawals is generally offered with most of the Endowment Plans. The policyholder can avail of the benefit of a policy loan after the successful payment of not less than 2 year’s premium while policy withdrawal is activated after the lock-in tenure of your policy. Make sure the plan you choose has these facilities as these are the extra cherries on the cake. 

Terms And Conditions of The Policy

Last but not the least, read the terms and conditions of your plan very carefully as you would be investing your hard-earned money into the plan, a minor recklessness can cause you big losses. Check the flexibility of the plan, if it satisfies and covers all your financial needs. Compare the chosen plan’s maturity and interest benefits with other plans available on the relatively same premium to confirm that you’re choosing the best deal for yourself.

Takeaway

An Endowment Plan comes with its set of benefits and risks like any other policy but its flexibility, safety and additional benefits lure the individuals to invest in it thus making it one of the most sought after plans. You must check and analyze your Endowment Plan with all the perimeters mentioned above to ensure the most profitable return and the safest future for yourself. 

Also Read: 

Does It Make Sense To Surrender An Endowment Policy?

What Is An Endowment Plan’s Premium?

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.