Types of Endowment Policy in 2024

Endowment policies also provide life insurance for a set length of time. An endowment plan provides financial protection for your family against life's uncertainties in exchange for affordable premiums. Furthermore, the returns can assist you in achieving long-term financial goals including purchasing your dream home, funding your child's school, planning for retirement, and much more.

This policy is an all-rounder because of all of this, as well as the financial protection provided by a life cover. It enables you to achieve all of your financial objectives simultaneously. So start saving now for your family's future protection and security.

Types of Endowment Policies in 2024

The various types of endowment plans in 2024 are mentioned here:

1. Full-Endowments

These plans, which are also known as with-profit endowment plans, guarantee you a certain amount at the end of the policy period, known as the sum assured. The insurer pays this sum to your nominee if an unpleasant event occurs during this time.

However, because the insurer offers you additional money in the form of incentives, the maturity benefit you receive after the policy matures is frequently more than the sum assured.

As a result, full-endowments can assist you in accumulating a large sum of money over time.

2. Low-cost Endowment

The premium for this plan is lower, which allows you to save for future payments that are due after a set length of time. In the event of an emergency, the insurance will guarantee the amount your nominee would get. Yearly bonuses also boost the amount you'll get when you reach retirement age.

The main goal is to set up a fund in a specific time range. This form of endowment can thus be used to fund loan repayments or specific life objectives.

3. Unitised With-Profit Endowment Plan

These plans combine ULIPs' great earning potential with guaranteed returns to protect your money from market swings.

The capital market determines the scope of profit using these initiatives. However, by guaranteeing a payout at maturity, these plans mitigate the impact of market downturns. You are guaranteed to receive this guaranteed repayment, regardless of market volatility. Your candidate receives this amount while you are away.

As a result, you can think of this product as a risk-free investment with a high potential return.

4. Non-Profit Endowment

This policy pays you a lump sum payment at maturity or to your nominee in the event of a catastrophic occurrence, whichever comes first. Because the insurer does not provide bonuses with these plans, the payout amount remains static.

As a result, these plans are great as financial safety nets for your family while you are away.

5. Unit-Linked Endowment Plan

This is for folks who are willing to take a lot of risks to get the most bang for their buck. The premium is used to purchase investment fund units in this fixed-term plan. Market performance determines the fund's eventual return on investment. It also includes life insurance for the covered person.

Benefits Of Endowment Policy

Endowment policies are one of the best financial tools available to help you achieve your goals because they offer so many advantages. However, before you buy, you should learn about the many types of endowment plans and which one best meets your needs. Here's a quick rundown.

• You can also borrow money against your policy if you're short on funds.
• You can also deduct up to 1.5 lakh in premiums paid under Section 80C of the Income Tax Act, 1961, with this plan.
• In addition, the maturity amount is tax-free under Section 10(10D), subject to the criteria therein.

Conclusion

Endowment plans are a great option if you want to have the best of all worlds: investment, insurance, and tax savings. Consider the benefit of guaranteed returns while thinking about purchasing one. With the guaranteed sum secured at maturity, the capital you invest is safe. Your fortune will expand as a result of regular bonuses. And having a steady stream of income until you're 99 years old offers financial security even after you've retired.

You may also like to read -Difference Between Term Plan And Endowment Plan

Disclaimer: This article is issued in the general public interest and is 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.