As hard as you work, it seems like your money just disappears from under your nose!
It would almost appear as if you deposit your hard-earned money in a special bag
that has no bottom – because however much you work, it is just not enough!
Rising living costs and inflation serve to curtail most of your income while you
are still paying for the essentials such as children's education, household expenses
and groceries. You are willing to work all the hours in a day but at the end of
it all, you are still left with several unrealised dreams and insufficient money.
As your children grow up and make demands of their own, you wonder if you will ever
be able to amass enough wealth to make your loved ones' dreams come true.
In the midst of these worries is a bigger one: what will happen to your family if
you are no longer present in their lives? Can they sustain themselves when there
is less money to begin with?
It is time to stop worrying and take affirmative action. It is time to explore a
useful insurance product known as the 'endowment plan'.
What is an endowment plan?
An endowment policy is an insurance plan designed to offer protection with life
coverage and the chance to grow wealth through systematic savings. It encourages
the policy holder to save money regularly so that he may have a large corpus of
money waiting for him in the future. There is also the prospect of capital growth
over a long term.
Benefits of endowment policy
The most important endowment policy benefit is that it offers better returns on
investment than fixed deposits or simple life insurance policies.
The endowment plan benefits the policy holder thus: he
chooses the frequency of premium payment (monthly or annual). This payment is actually
the premium payment for the policy. The insurance provider now splits the money
paid into two components:
-
One is paid towards the plan premium.
-
The other is invested in high quality equities or other market instruments.
This second component fetches good returns on capital investment over a long period
of time. In reality, these returns are sourced from the profits of the companies
that the endowment plan invests in, and is given to the policy holder in the form
of bonuses.
The plan's maturity benefit includes terminal bonus and reversionary bonus. Also,
the policy holder gets excellent tax benefits on investing in endowment plans.
Hence, with an endowment plan the policy holder is not just investing money and
gaining returns on it but also arranging for a valuable corpus of money that his
family can use in his absence. The endowment plan results in a large savings fund
that can be useful for a variety of personal purpose, business purpose or simply
in times of need by your loved ones.