Due to increasing uncertainties and fast-paced life, the rate of buying life insurance policies go high. But again, due to the availability of an abundance of policies, people often get confused which plan to buy. Sometimes, your colleagues and friends push you towards a particular plan which you are not aware of, and you buy it just for the sake of others. But, before opting for any life insurance policy, you must be mindful of the pros and cons of it. Endowment policies are also trending nowadays along with term insurance plans. This article aims to focus on four things that you must consider before buying endowment policy. Requirements for an Endowment Policy An endowment policy is designed for them who seek a lump-sum amount after a specific period and have steady as well as regular income. The endowment policy enables saving your hard earned money in a disciplined way so that the corpus built through the policy can be utilised in case of any situation. If you have comparatively less risk appetite and don’t mind getting smaller returns from the investments, endowment policy is for you! Best time to buy an Endowment Policy We always take care of our loved ones. We often need a risk-free tailback that will provide a bunch of money at a particular instance of time. This will be helpful in case of an emergency that you need not worry about. Endowment policies are designed in such a way to help you build a corpus for the long-term goals. It offers not only a mass but also the insurance cover. You can opt for an endowment policy, anytime considering you are capable enough of paying the premium amount regularly. You can choose for single-pay premium instead of regular pay if you are not able to forecast your future. Benefits of an Endowment Policy The most useful function of an endowment policy can be stated as it helps you achieve your financial goals by savings your hard earned money in a disciplined way. When it comes to the financial safety of your loved ones, and you are the only wage earner in the family, the endowment policy helps a lot. In case of unfortunate demise of the life insurance, the endowment policy offers full sum assured as decided at the inception of the policy. With the help of the corpus, the lifestyle of your family will be sustained even in your absence. The returns gained through the policy may seem lesser, but indeed, they are guaranteed. Last but not the least, tax benefits! You are entitled to get tax benefits under Section 80C and 10(10D) of Income Tax Act. How to Choose the Perfect Policy? Currently, the market is cluttered with lots of endowment plans from which you need to choose the perfect one. The factors to be considered while opting for an endowment policy are the current as well as future financial needs of your family, the lifestyle, risk hunger, and the income state. Also, don’t forget to compare the premium rates and the claim settlement ratios of the insurance companies. Remember, a small mistake may result in disturbing the entire budget for a long run. These are the four necessary things that you have to understand while buying an endowment policy. Considering all these things and your readiness of taking the risk, select the appropriate plan best suitable to your needs.
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February 2022
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