Friday, 22 April 2022

Benefits of Endowment Policy & How to Choose the Right Endowment Plan?

Benefits Of Endowment Policy: Choose Best Endowment Policy

An endowment policy is essentially a life insurance policy which, apart from covering the life of the insured, helps the policyholder save regularly over a specific period of time. Such disciplined savings enables the policyholder to get a lump sum or regular income to fulfil long-term financial needs such as children’s education, marriage, retirement goals etc. In the event of the unfortunate demise of the policyholder, the endowment policy provides a meaningful financial support to his/her beneficiaries.

In short, endowment insurance plans fulfil the dual need for a life cover and savings under a single plan. Thus, any life insurance plan with a saving component and lumpsum insurance benefit can be termed as an endowment plan.

Benefits of Endowment policy

Life cover ensuring financial protection for your loved ones, in your absence
Inculcates the discipline of regular savings to meet your future financial needs
Helps accumulate a savings corpus to serve your long-term investment goals
Endowment plans offer tax exemption on both premium payments and on maturity/death benefit - under section 80C and 10(10D), respectively
Some endowment plans also provide you the option to avail loan against the policy, in case of a financial emergency

How to choose an endowment plan?

Opt to pay premiums as per your saving capabilities - Individuals with a steady regular source of income could opt for the regular premium payment endowment policy, while those with irregular income, can choose the single premium option. Select an endowment plan which offers you ample options to choose the number of years you would like to pay the premiums and the frequency of such payments.
Rider benefits – You can also opt for additional benefits in the form of riders with an endowment policy. You can select an endowment plan which offers you the benefit to safeguard against unfortunate events like accidental death, disability etc. and thus expand your insurance coverage.
Company credentials –
- Claim Settlement Ratio - The claim settlement ratio of an insurer is the number of claims settled against the number of claims filed: the higher the ratio, the better the insurer.
- Solvency Ratio - A life insurance provider with a high solvency ratio is more likely to be financially stable and therefore, more equipped to pay out your insurance claims and survive for a long time. Higher the ratio, better is its ability to settle claims.
- Customer Centricity - A company’s commitment to service excellence should hold top priority. You, the customer, should always be at the core of the company’s operations, and should be dealt with, with empathy and understanding.
- Digital Strength - Access to online tools, literally at the click of a button, whether at the time of purchasing a policy, paying a premium, renewing the policy, resolving a complaint or settling of claims will ensure a convenient and hassle-free customer experience for you.