5 THINGS YOU SHOULD KNOW BEFORE BUYING ENDOWMENT POLICY .

1.  Salient Features of an Endowment Policy

One can use this maturity benefit to fulfill their various financial needs like funding their children’s education, saving for retirement, buying a house, children’s marriage etc.
The major benefit that can be availed under endowment plan includes financial security of the loved ones, tax exemption under section 80C and (10D) of income tax act, goal based savings, in case of any emergency option to avail loan facility against the policy.
2.  Who Should Consider Buying an Endowment Policy?

 As mentioned above, endowment policy can be a great savings option for those who tend to spend excessively without keeping any financial backup. They may require a significant amount in hand, after a certain period of time in life (especially after retirement) and an endowment plan helps them to follow a disciplined route of saving.
Any individual, who wants to meet their long-term financial needs, can opt for an endowment plan that provides a dual benefit of life coverage along with saving opportunities.
3.  What are the Right Circumstances of Purchasing an Endowment Policy?

According to one’s financial needs, every individual requires a risk-free assured investment. Therefore, endowment policy should be bought to cover three areas i.e. first to protect and ensure financial stability to the loved ones, second to achieve the financial goal, third build savings to achieve investment objectives over a long period of time.
4.  Why Should You Buy an Endowment Plan?

One of the major reasons why one should buy an endowment plan is that it provides an opportunity to save money in a disciplined way to fulfill the future financial needs.
An endowment plan may give you lower returns but the investment associated risk is very low in an endowment plan. Under endowment policy, the policyholder can also avail tax benefits on the returns.
5.  What checklist should One Keep in Mind While Buying Endowment Policy?

As you can get a wider option of endowment plans available in the market, choosing an apt policy for yourself depends on numerous factors including individual needs, income, current life stage, risk appetite etc. If you are thinking of investing a huge amount in an endowment plan, never forget to compare the quotes beforehand. By checking the premium rates of various endowment plans, you will be able to pick the right plan for you.


Source: policybazaar/life-insurance/investment-plans/articles/things-should-know-before-buying-an-endowment-plan/

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