Who Should Purchase an Endowment Plan?

Endowment plans combine the benefits of saving and insurance with the added security given by riders. These strategies avoid market risk, resulting in predictable profits. Endowment plans are more beneficial for investors because of this aspect.

With so many insurance options available on the market, it's crucial to determine which plan is right for you.

As a result, we have included information on who can acquire an endowment Insurance plan in this article.

Who Should Purchase an Endowment Plan?

Following set of people can consider investing their money in an endowment plan - 

• Risk Averse Investors

Endowment plans do not deal with risk because they operate independently of market conditions. If you want complete peace of mind about the money you've invested, it might be right for you.

This feature will ensure risk-free returns, which can be evaluated according to your risk appetite.

• People Seeking Financial Protection

Long-term investments and life insurance coverage are two advantages of endowment plans. This is advantageous because the customer may take advantage of this opportunity without fear and save and invest for future returns, while the benefits are still repaid in the form of life insurance coverage if something goes wrong.

• For Tax Benefits On Returns

For those hoping to save money on their taxes, this is a profitable option. Under section 80C of the Income Tax Act, an investment in an endowment plan is eligible for a tax deduction of up to Rs 1.5 lakh. In addition, under section 10(10D) of the Income Tax Act, the profits derived from it are tax-free. This will ensure a hassle-free money transaction in the event of an emergency or when the cash is released upon the policy's maturity.

• Investors across all life stages

Endowment plans can be opted for depending upon the life stage you are in and your needs and financial liabilities at that point in time. 

One reason a young person may purchase life insurance at a young age is to ensure that the rates remain cheap even if the person requires life insurance in the future. This is because premiums rise with age, as increases the likelihood of ailments, causing issues with your medical exam.

The maximum age for purchasing an endowment insurance policy is 55- 60 years old.

However, because of the low premium benefits and life planning benefits, it is highly suggested to invest in an endowment Insurance plan at a young age.

• People With An Irregular Income

The premium payment under an endowment plan can be set according to your preferences. Payments can be made monthly or over a longer period of time. This element increases the plan's flexibility and is beneficial to investors in circumstances of an irregular income.

Investors have the option of choosing Flexible or  single payment options.

• Smokers

The insurance company will classify you as a smoker if you have smoked tobacco products in the last 12 months. Cigarettes, cigars, gutka, beedi, khaini, flavoured pan masala, nicotine patches, and chewing gum are all examples of tobacco or nicotine consumption.

Despite the fact that smokers pay higher life insurance premiums than nonsmokers, they nevertheless get a decent deal.

Endnotes

Endowment plans are a great way to invest and insure your money. To take advantage of the benefits, you must first determine whether an endowment plan is right for you.

The information in the preceding article will assist you in this endeavour.

Also read 

Steps To Buy Endowment Insurance Plans Online

Top Companies Offering Endowment Insurance In India

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.