In India, you may find multiple types of life insurance policies, each satisfying a different set of needs and requirements. One of the popular types of life insurance plan is an endowment policy.
Although, such an insurance plan is more of a traditional investment option, it is suitable for satisfying a wide range of goals. In this article, we’re going to take a look at three goals that an endowment plan is designed to satisfy. Before we proceed, let’s first try to get to know what is an endowment plan.
Life Insurance Endowment Policies
As you’ve already seen above, an endowment plan is essentially a type of life insurance plan that combines two aspects - insurance and savings. Such a plan provides you with a life cover of a certain predetermined sum of money for a specified period of time, in exchange for premiums.
Additionally, it also provides you with returns. Depending on the type of plan chosen, you can get regular income or a lump sum at maturity. Since endowment plans provide both death and survival/maturity benefits, they’re one of the popular plans amongst insurance buyers.
3 Goals That You Can Fulfil with an Endowment Insurance Plan
So, now that you’re aware of what an endowment policy is let’s move on to the kind of goals that you may satisfy with one.
1. Stress-Free Retirement
Every individual wants to live a debt-free life, especially when they will not have a stable income coming in and want to kick back and enjoy their retirement. And an endowment plan is one of the preferred ways to help you get to this goal. Although it is recommended you pay all outstanding debts before hitting retirements, the maturity benefits that you receive at the end of the plan’s tenure may be used by you to settle your outstanding debts and loan obligations. This may help free up your finances and enable you to live a life without debts. That’s not all, in the event of the policyholder’s demise, the death benefit can also be used by their nominees to settle any outstanding debts that the deceased may have left behind.
2. Secure Your Family’s Financial Future
This is another major goal that individuals may have - ensuring their family’s financial well-being when they’re no longer around to support them. Did you know that an endowment plan may help you attain this financial goal as well? The death benefit payout that an endowment plan provides can help a policyholder to financially secure his/her family. The payout can be used by the deceased individual’s family to take care of their expenses and further their life goals, whatever they may be. This keeps your family safe, and also keeps you free of the burden regarding their wellbeing in case of your absence.
3. Ensure a Stable Post-Retirement Life
Once you’re retired, you generally lose your main source of income. Therefore, it is important to ensure that you set your finances right in order to enjoy your post-retirement life without having to worry about money. The maturity benefit of an endowment policy may help you build a corpus to make sure that your post-retirement life goes on as smoothly as possible without having to worry about finances. For instance, you could invest the lump sum amount that you receive upon the maturity of an endowment plan in an annuity plan and receive a monthly income, which can be used to take care of your family’s expenses.
As you can clearly see, an endowment insurance plan is one of the effective investment options that’s designed to ensure financial stability for not only yourself, but also your family. That said, before you go ahead and consider purchasing an endowment policy for yourself, always remember to evaluate it thoroughly to determine whether it fits with your goals perfectly. This way, you will make an informed purchase decision.