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Features of the Endowment Plan Indian Money Reviews
Survival Benefits - An endowment plan not only covers the life of the holder, but also pays out a lump-sum if the holder survives till maturity.
Premium Payment - Premium payment can be monthly, quarterly, bi-annual, or annual. The holder can choose the frequency of premium payment and type of policy.
Returns - If a person wants to accumulate wealth for the future and secure the livelihood of his family at the same time, endowment plan is a good option. The survival benefit and death benefit are higher than regular life insurance policies.
Low Risk - The risk factor is lower as compared to other investment options like Mutual Funds or ULIPs as the amount is not invested directly in the stock market.
Riders - Add-ons, also called riders can be taken at a slightly higher premium to increase the scope of the policy. Critical illness, total permanent disability, accidental death are some of the riders that can be taken. Some plans have the facility of waiver of premium in case of total permanent disability or critical illness.
Tax Benefits - The policy holder can claim premium and final pay-outs as exemption from tax under Sections 80C and Section 10(10D) of the Income Tax Act, 1961.
Bonus- Bonus is a non-guaranteed benefit of endowment plans that is available only for holders of “Policy With-Profit”. If the insurance company is performing well in terms of its investments and earns profits, it can distribute a part of the profits by declaring a bonus. This amount is paid out at maturity of the plan or death of the holder. The two main types of bonus are Revisionary Bonus and Terminal Bonus.
Revisionary Bonus: The bonus keeps getting added to the policy and keeps accumulating till maturity or death. Once the bonus is added, it cannot be withdrawn. It is paid out of the profits of the insurer.
5 Things to know Before Buying Endowment Plan
1. Plan Well
Before purchasing an Endowment Plan, Indianmoney review which is an important to plan ahead. Planning must be done as early in life and career as possible. Understand the objective of taking the plan, personal financial condition and so on before purchasing a policy.
2. Flexibility Options
Explore all the options that the insurer makes available to the purchaser. Indianmoney review Bangalore Quantum and frequency of premium payment, riders to the policy, bonus and so on are all different between insurers.
3. Research the Company
An important thing to do is check the company’s track record and bonus history. Understand the company’s past performance, and if want to opt for ‘with-profit policy’, look into the bonus declaration records of the insurer.
Every endowment plan has two types of returns, guaranteed and non-guaranteed. Apart from the insurance and savings, many companies offer non-guaranteed returns in the form of bonus. Since both as a whole form total return, compare different insurers to know where you can get higher returns.
5. Claim Settlement
How easy is it to get claims settled, and what are the conditions involved are some important details that should be clear. Go for plans which are simple to understand, and avoid complex features as there may be things that you won’t understand. Opt for an insurer who has claim settlement ratio over 90.
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