Who Can Opt For Endowment Insurance Plans?
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Endowment plan is a life insurance policy that provides you with a combination of both i.e.: an insurance cover, as well as a savings plan. These plans are like regular insurance policies. They not only provide the policyholder with a life cover but also help to save on a regular basis. And once the policy completes its tenure with the given criteria that the policyholder has survived the whole policy term, the policyholder will receive a lump sum amount. This amount can be used to meet financial needs like purchasing property, children’s education or retirement etc.
Features of Endowment plans
The following are the key features of endowment plans-
1. Life Cover
Endowment policies pay a lump sum amount to the beneficiary in case of any unfortunate event with the policy holder.
2. Maturity Benefits
The unique feature of endowment plans is it guarantees benefits upon maturity. On the completion of the tenure of the policy, the policy holder receives the sum assured as the maturity benefit.
3. Premium Payment
Usually, the premium payment frequency can be opted by the policyholder as per convenience. The policy holder can opt for monthly, semi-annual, or annual payment mode, or the entire amount can be paid in lump sum.
4. Low Risk
Market performances have less impact on traditional endowment policy. The money remains secured through the fixed sum assured. Regular guaranteed additions ensure that wealth increases. Thus, endowment policies minimize the risks involved in investments.
5. Tax Benefits
Did you know that you can claim deductions from your taxable income for your endowment policy premiums? Under Section 80C of the Income Tax Act, 1961, you can claim deductions of up to ₹ 1.5 lakhs for premiums paid in a financial year.
Who Should Buy an Endowment Plan?
Endowment plans can help in building adequate corpus through disciplined savings. Thus, these can help you meet the long-term financial goals. Do you plan for buying real estate, or need to save for your child’s college fees? Or you may even have foreign trips in your bucket list. Or wish to create corpus for retirement needs. Endowment plans can help in fulfilling all such objectives.
Moreover, if you have financial dependents, losing the support of your monthly income can cause financial distress for them. The life cover provided by endowment plans protects your loved ones against any such misfortunate events.
Why Should you Buy an Endowment Plan?
Endowment plans offer the following benefits which make them a preferred investment solution -
- Safeguards your loved ones against economic hardships in case of any unfortunate event.
- Helps in creating corpus for your life goals through regular savings
- Keeps your savings secure against any fluctuations in the capital market
Conclusion
Protection of life and savings to build a corpus make endowment policies one of the most useful financial tools to safeguard your dependents and loved ones from uncertainties of life and achieve your financial goals. Keeping the above pointers in mind while purchasing an endowment plan will assist you to get the policy best matching to your needs.
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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.
