Top Questions To Ask When Buying Endowment Insurance Plans

Endowment plans have been coming to light as market-leading plans since they include insurance protection, a maturity benefit, and a tax benefit. As a responsible investor, it is crucial to understand the basics of your insurance plan. Therefore, we've answered all of your questions about endowment plans in this article to assist you with the process.

Top Questions To Ask Before Buying An Endowment Plan

Before purchasing an endowment plan, here are some key questions to consider.

Q.1 What are the general exclusions under endowment plans?

Endowment plans, like other insurance plans, include some situations under which the company is not liable to pay Insurance coverage. Any claim arising directly or indirectly from one or more of the following is subject to general exclusions under endowment plans:

1. Self-injury or attempted self-injury
2. Involvement in violation of the law
3. Being under the influence of alcohol or drugs (exceptions apply)
4. Participating in activities or sports of high risks
5. Participating in any riot, and acts of civil commotion

Q.2 Can I take a loan against my endowment policy?

Endowment plans allow the policyholder to proceed with the process of taking a loan against the policy. Furthermore, they make the loan application process easier by lowering the quantity of paperwork required.

However, before making payment, the company has the right to deduct the outstanding loan amount plus all outstanding interest if the insurance expires or if any benefits are paid out.

Q.3 What are the riders offered under an endowment plan?

Riders are complementary benefits added to your endowment plan. They provide customised protection to the policyholder in case of specific events.

Riders offered under Endowment plans include: 

1. Accidental Death Benefit Rider 
2. Permanent Disability Benefit Rider
3. Critical Illness Benefit Rider
4. Life Guardian Benefit Rider
5. Accidental Disability Guardian Benefit Rider under which, the remaining premiums paid on behalf of the policyholder in case of accidental disability.

Q.4  Would I receive any maturity benefits?

According to the maturity benefits under endowment plans, the policyholder will receive the lump sum payout if the policyholder survives the maturity term. Maturity benefits, along with death benefits are the defining features of an endowment Insurance plan as they provide extensive protection to the policyholder.

Q.5 What happens if I discontinue paying the Premium?

Under Endowment plans, if you stop paying premiums after three years, your policy will be converted into a ‘Paid-up' for a lower Sum Assured based on the proportion of premiums actually paid to total premiums payable. Until the conclusion of the Policy Term, the life insurance protection will continue to the extent of the ‘Paid-up' value. However, once the policy turns into a 'Paid-up’ no further bonuses will be attached to the Policy

6. What happens if I want to discontinue the Policy?

 Endowment plans provide you the option to surrender your Policy and receive the 

Surrender Value. If your Policy has accrued any bonuses, you will be paid the cash value of the total amount when you surrender your Policy. The insurance protection provided by the Policy will likewise stop upon surrender.

7. What if I object to any policy condition after having bought the policy?

If the Policyholder disagrees with any of the policy's terms and conditions, endowment plans provide the option of returning the policy  to the Company for cancellation within 15 days of receipt, stating his or her objections, in which case the company will refund the Policyholder's premium after deducting the costs of the medical examination, stamp duty, and proportionate risk premium for the period of coverage.

You may also like to read:- Can I Get Any Discount When Buying Endowment Insurance Plans Online? 

Q.8 Is an endowment plan suitable for me if I don't have a regular Income?

Endowment plans provide the option of paying premium payment according to your preferences. Payments can be made monthly or over a longer period of time. This feature adds flexibility to the plan. This can be beneficial to investors in circumstances of erratic revenue.

Q.9 Is an endowment suitable for me if I have a low risk appetite?

Endowment plans operate independently of market conditions and, as a result, do not deal with risk. It may meet your requirements if you desire complete peace of mind when it comes to the money you've invested. This function will assure risk-free returns and can thus be evaluated based on your risk appetite.

Q.10 Would an endowment plan help build a savings corpus?

Endowment plans are popular among investors because they offer a dual advantage. Such plans provide the policyholder's family with a combination of savings and insurance coverage. It is a protective plan that will help you prepare for the future necessities.

Also Read:- Where Can My Family Raise An Endowment Insurance Claim? 

Endnotes

With so many insurance plans to choose from, it can be difficult to figure out which one is right for you based on essential features and benefits. The preceding article will clear up any doubts you may have and assist you in making your selection.

 

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.