What Is the Best Way to Compare Endowment Plans Online?

An Endowment Plan is a mix of both insurance and investment. It is a life insurance policy that provides the life cover to the insured by charging mortality cost and provide a return on investment through investing the remainder portion of the premium.The policy offers both death and maturity benefits (whichever happens earlier).Endowment policy helps you to accumulate adequate corpus along with providing financial protection in case of any unfortunate event to accomplish the financial goals in your life like child's education, marriage, post-retirement expenses, etc.

What are the Benefits of Buying an Endowment Plan?

Following are the key benefits of an Endowment plan.

• Insurance Benefit

An endowment plan offers the insurance benefit by providing the life cover or sum assured to the nominee in the event of the death of the life insured during the policy term. It ensures financial protection for your dependents in case of such unfortunate event.

• Maturity Benefit

By investing in an endowment plan, you can get the lump sum amount plus accumulated bonus or the fund value at the maturity of the policy, provided you have paid all the due premiums. The maturity amount also helps you gain financial security and a huge corpus to take care of the planned financial objectives or fore post retirement life.

• Guaranteed Benefits

Policyholders of ‘With Profit’ Traditional Endowment Policies are entitled to receive a portion of the profits/dividends as declared by the insurance company in the form of a bonus or guaranteed. The bonus amount may differ depending on the company’s investment & return assumptions and bonus distribution policy. For Ulip’s, there are no guaranteed benefits as the returns are based on market performance or fund performance. However, few insurer’s might add Loyalty Units to the fund in the last few years before maturity.

• Rider Benefit

With an endowment plan, you can avail the option to attach riders or add on covers to enhance the protection under your policy. You can choose from various available riders such as Accidental Death Benefit, Critical Illness rider, Family Income Benefit, Waiver of Premium, etc. by paying additional rider premium amount.

• Surrender Benefit

In times of liquidity crunch, the endowment policies may be surrendered as per the terms of the policy, after the lock in period of 3 to 5 years. The surrender value is however given after applying certain surrender charges which vary from insurer to insurer.

• Loan Benefit

Endowment policies offer the option to avail the loan against the policy. To obtain a loan, you need to fulfill some conditions such as payment of premiums for a minimum of 3 year policy period. The loan facility under the plan helps you to fulfill the financial needs of your family and quench the immediate cash requirement.

• Tax Benefit

You can get the tax benefits under Section 80 C for the premium paid for an endowment plan. The proceeds of the policy are tax free as mentioned under section 10 (10) D of the Income Tax Act, 1961.The laws are subject to change.

What are Some Smart Online Buying Tips ?

Following are some key tips you may refer to before buying an Endowment Life Plan.

• Assess your Financial Goals

Before investing in an endowment plan, it becomes quite essential to assess your financial goals to be met at different stages of your life. It helps you make a right move to identify an amount you need to invest so you can easily get a huge corpus at the maturity of the policy. The higher the premium you pay towards the investment component of the plan, more will be the returns.

• Assess Life Cover

An endowment plan also provides the life cover in terms of the sum assured to ensure financial protection for your family in the event of your demise. It is one of the most important aspects when seeking the family’s happiness. Firstly, you need to consider the financial obligations such as children’s education, marriage, or debts and then choose a coverage amount that can ensure that your family is not overburdened to pay the financial liabilities in your absence.

• Invest Early

It is recommended to buy an endowment plan early in your life. The reason being if you buy an endowment plan early in your life say at an age of 25 years, you can build a huge corpus that you will receive at the maturity of the policy. Moreover, investing in the plan in the younger age enables you to get the life cover at the lowest cost.

• Assess Plans Online

Don’t be in a hurry or get influenced by your agent. Before buying an endowment plan, it would be a wise decision to compare the plans from different insurers and choose the one that suits your needs. Buying the plan online would be a right move, as insurers usually offer premium discounts on online buying.

• Choose Add-on Covers

Add-ons enhance protection to your basic endowment plan, and all these are available at an additional cost. It is thus advisable to assess the benefits available with the add-ons and choose the one that suits your needs and budget.

• Check your Insurance Company’s Record

It is imperative to check on the crucial details of your insurance company like is it IRDAI approved, about the claim settlement ratio, about the financial stability, about the bonus rate offered on the endowment policies, investment expertise of the insurer, customer services, etc. Life insurance is a long-term contract it is better to be safe than sorry!

• Read the Expert Reviews

Before you finalize any decision to buy a plan, don’t forget to read the expert reviews on the same. There are several expert reviews from the industry which could help you know how useful it would be to buy a particular endowment plan. You can also consult with your friends, colleagues, and family members about the plan.

• Magnify the Fine Print

Knowing all about the policy terms & conditions, its benefits & exclusions are quite imperative, so read through the policy wordings to get the clarity about the policy and then go ahead to buy the policy.

Conclusion

There are a large number of endowment plans in the market with different variants. Benefits also can come in a large number of ways - lumpsum, spread over a period of time or for the rest of your lifetime. It becomes difficult to compare the benefits and zero-in on the plan which will best suit your interests.

Also Read: Look For An Endowment Plan To Assist You In Growing Your Savings.