Figuring out Endowment Plans
Do you spend your money on things you don't need? Do you find your money so depleted by the end of the month that you don't have enough to save? Then an endowment plan is something for you.
Endowment plans provide you a life cover and allows you to save for your future. It gives you tax-free returns, which you can use to meet your life goals or can be used for emergencies.
Endowment plans are a simple saving option which helps you protect your family financially.
To understand if an Endowment Plan is something you need or not, let's have an in depth look at it. This is what you will learn from this article:
- What is Endowment Plan?
- How does Endowment Plan work?
- Benefits of Endowment Plan.
- Why Endowment Plan is a good investment?
- Who should buy Endowment Plan?
- What to consider while buying Endowment Plan?
- How to buy Endowment Plan?
What is an Endowment Plan?
Endowment plans are a kind of life insurance plan that gives you the advantages of two benefits. It gives you a life cover as well as helps you save and grow your wealth for the future.
The life cover offers financial protection and secures your family during difficult times. A death benefit is paid as sum assured to the nominees of the policy in case of the unfortunate death of the insured. This sum assured can be used by your family to achieve their life goals like education, marriage, retirement, etc.
Endowment plans also allow you to save and grow your money for your future goals. It helps you build a generous financial corpus which you receive at the end of the policy term. This money can be used to fulfill your financial needs like retirement, child's education, buying a new house, etc.
How does Endowment Plan work?
When you buy an endowment plan, you get a life cover. In case of an unfortunate death, the nominees will be paid a fixed amount as Sum Assured.
You also receive a regular income for a specific period of time till the end of your policy term. This income is a small percentage of your Sum Assured.
Certain endowment plans like ABSLI Guaranteed Milestone Plan give Guaranteed Additions. Guaranteed Additions will accrue on monthly basis to the policy till maturity, provided all due premiums have been paid. This shall be payable in the event of death of the life insured or policy maturity, whichever is earlier.
Benefits of Endowment Plan
Protection with Life Insurance
An endowment policy gives you the benefit of life insurance. You get a life cover which ensures your family is protected and are able to live stress-free even in your absence. The nominees of the policy receive a fixed amount as Sum Assured, in case of an unfortunate death of the insured. With this death benefit you ensure your family can achieve their financial goals and keep their future secured.
After the end of the policy term and incase of the survival of the insured, the policy matures. This means that you will receive an amount as a maturity benefit. The maturity benefit you receive is tax-free under Section 10(10) on the Income Tax Act. This maturity benefit can help you meet your financial goals and give you a secured future. The amount of your maturity benefit depends on your age, gender, premium paid and policy term.
Endowment plans give you tax benefits. You can save on your taxes with the premium you pay as per Section 80C of the Income Tax Act. Additionally, you also get tax benefits on the maturity amount you receive as per section 10(10) of the Income Tax Act. This helps you save taxes at the beginning of the policy term as well as towards the end.
Long term savings
Endowment plans help you save your money for your future. You get a guaranteed monthly income for a fixed period of time at a later stage of the policy term. This helps you build your wealth and secures your financial future.
In addition to your maturity amount, you may also receive bonus payouts. Bonus payouts depend on the profits of the company. These bonuses get accumulated over time and are paid to you in full at the time of maturity of the policy.
Why Endowment Plan is a good investment?
Endowments plans are a low risk investment. You get a life cover, which protects your family during unfortunate times. The life cover ensures your family's future is secured. Knowing this, you can live a stress-free and peaceful life.
Endowment plans also offer a saving option. It is a disciplined way of saving money in the present for your future needs. You receive a guaranteed income in later stages of life. With this money you can achieve your financial goals in the future.
Who should buy Endowment Plan?
An endowment policy is suitable for anyone from a young professional to a senior citizen. You may have a family who is dependent on you financially. You may also have long term financial goals which you aim to achieve at a later period in life. Endowment plans help you meet these requirements.
Endowment plans give you a disciplined saving option which will help you as well as your family. For small business persons, salaried individuals, professionals like lawyers and doctors who have long term financial goals, an endowment plan is recommended.
If you are looking for a low-risk plan with the benefit of insurance and savings, an endowment policy is for you.
If you are looking for lump sum maturity for long-term goals, go for an endowment plan .
If you want to save small amounts of money over the long-term and get tax benefits, an endowment policy is best for you.
What to consider while buying Endowment Plan?
With many options of endowment plan available, which one is best for you? Consider these points before you buy an endowment plan.
- Cost of the premium: Since endowment policies are a long-term financial commitment, ensure your policy has an affordable premium.
- Bonuses: Some endowment plans offer bonus pay out. If you are looking for steady grow of wealth, look for endowment plans that give you guaranteed additions.
- Claim settlement ratio: Make sure the insurer of your endowment policy has a claim settlement ratio. Also ensure the settlement process is simple and quick. You do not need too much hassle while processing your claim.
- Additional riders: Riders provide additional protection for an extra nominal fee. You can be covered for critical illness, disability, hospitalization and accidental death.
How to buy an Endowment Plan?
Visit the ABSLI website: https://lifeinsurance.adityabirlacapital.com/
Go to your preferred savings plan.
Click 'Buy Now'
Fill in your contact details.
Our team will contact you and help you in buying your preferred Endowment Plan.
ABSLI Guaranteed Milestone Plan (UIN: 109N106V10) is a non-participating traditional insurance plan. All terms & conditions are guaranteed throughout the policy term. GST and any other applicable taxes will be added (extra) to your premium and levied as per extant tax laws. An extra premium may be charged as per our then existing underwriting guidelines for sub-standard lives, smokers or people having hazardous occupations etc.
ABSLI Vision LifeIncome Plus Plan
Get guaranteed regular income, cash-in-hand even while paying premiums PLUS life cover up to a maximum of age 100 UIN: 109N131V01
- *Guaranteed regular income for a period you choose
- Option to get cash-in-hand even while paying premiums
- Life cover up to a maximum of age 100
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