Different Uses of Endowment Policies
Endowment plans are one of the best types of life insurance policies. To fulfill their life insurance needs and financial goals, investing in endowment policy is one of the most popular choices. But wondering what makes endowment policy one of the most preferred life insurance products? Here are a few reasons why investing in endowment plan is a good idea.
- Helps you become a disciplined investor: One of the biggest advantages of investing in an endowment plan is that it helps you save money in a disciplined manner. Your wealth grows as you pay the premiums on time.
- Keeps you family protected: While increasing your wealth, an endowment policy also keeps your family protected. In case of your untimely death, sum assured along with bonuses, if any is paid to the policyholder.
- Mix of insurance and investment: An endowment plan is a mix of insurance and investment. The premium that you pay is divided into two parts i.e. one part is paid towards life cover and another is paid towards investing in fund.
- Offers risk free investment option: Investing in endowment plan is risk free and offers you guaranteed returns as the money is invested in government bonds and cash funds. With this, you stand no chance to lose the money.
- Helps you achieve your financial goals: Endowment policies help you build a strong financial corpus and meet your long-term financial goals. For example, if your child is 5 years and you want to save for his education/marriage, then you can start investing in an endowment policy to build a healthy corpus for the future.
- Avail loan against the policy: If you are stuck in a financial situation, then you can easily get a loan against your endowment policy. Thus, it helps you in case of any financial emergency.
- Helps you save on tax: Purchasing an endowment policy gets you tax benefits of up to 1.5 lakh under section 80C of the Income Tax Act, 1961.
- You can buy it easily: You can now easily buy an endowment policy now as these plans are now available online and you can compare them to get the best deal. You can get discounts of up to 20%-30% to get the best deal online.
- It can become a regular source of income: To ensure you get a regular source of income, you can opt for a plan that offers you bonus at regular intervals. You can opt to get a profit at regular intervals to get a steady flow of income coming your way.
- Long term cover: You can buy an endowment plan for many years i.e. even for 90-100 years. This can help you stay covered for long and keep your family financially secured until your death.
- You can cancel the policy anytime: If anytime during the term of the policy, you feel that this insurance product does not suit your financial goals, then you can simply cancel the plan anytime and look for a different life cover.
- Different types of endowment plans: You can choose to opt for different types of endowment plans such as child plans, retirement plan, whole life plan, etc.