What is Sum Assured in Endowment Policy

Insurance assurance and maturity benefits are both provided by endowment policies. Most individuals consider this a good substitute for investing in savings and accomplishing personal goals. However, the idea of sum assured could be more precise because the product differs. Before moving on to the endowment policy, let's briefly discuss what it entails.

What are Endowment Policies?

A life insurance policy known as an endowment policy enables the policyholder to routinely save money over the policy's specific term and provide life insurance to the insured. By the time the insurance matures, the policyholder will have adequate corpus. Additionally, if the policyholder lives out the period, they can get a respectable lump payment.

What is the Sum Assured in Endowment Policy?

The amount paid to the insurance recipient in the terrible event of the policyholder's death is the sum insured in an endowment policy. An endowment policy is a type of life insurance that protects the beneficiary's life. Based on your willingness to pay a premium and the options provided by the insurance company, the sum assured is decided at the start of the policy.

Sum assured, then, is the fixed amount that was decided upon at the time of policy enrollment and that the nominee would acquire in the event of the policyholder's passing. However, the policyholder is entitled to receive the sum insured as a maturity benefit if they live out the policy's whole term.

What are the Benefits of an Endowment Policy?

Generally, any life insurance policy that includes savings and lump sum maturity benefits can be referred to as an endowment policy. An endowment policy offers a variety of advantages. The following are a few of the vital ones:

• Life insurance provides your loved ones with financial security while you are away.
• An endowment plan allows the policyholder to accumulate wealth while still having life insurance to protect them.
• It teaches you the discipline to save money regularly for your future requirements.
• Policyholders of endowment plans are eligible for a variety of bonuses. The insurance firm announces these bonuses. Bonuses are excess sums of money paid by an insurer to the policyholder for various reasons, such as loyalty bonuses, terminal bonuses, etc., in addition to the investment proceeds.
• It aids in building up a savings account to support your long-term investment objectives.
• Taxes² are not due on the money assured or bonuses a policyholder receives after living through the policy period.
• With endowment plans, you can customise your insurance coverage to meet your needs by adding insurance riders. You can include riders, such as riders for critical sickness, riders for disabilities, riders for accidental death, etc.

Quick Wrap Up

Endowment plans are the most profitable sort of investment. Although the insurance may offer slightly lesser rewards than other products, it has low risk and significant liquidity. When you compare an endowment plan guaranteed³ benefits to any other product, you'll see it's a wise investment. It allows you to secure a loan and deal with emergencies, which is a lifeline in challenging financial circumstances. Above all, the plan provides your family and you with complete financial stability. https://lifeinsurance.adityabirlacapital.com/endowment-plan/income-assured-plan¹