Most people are confused between the different kinds of life insurance plans in India. One of the most popular ones is the ‘traditional endowment plan’. However, it is important to be clear about the objectives where endowment plans fit in your overall financial outlook. It is best to invest in these plans only when you are clear about your life insurance objectives and how you want the policy to serve you.
Due to their traditional nature, endowment plans are often overlooked for other insurance and investment options. However, endowment plans still have their charm, especially when you want to combine life cover and safe investments. The below are three objectives where endowment plans fit your objectives very nicely.
The 3 objectives where endowment plans fit: Key benefits of endowment plans
#1 For assured protection of your loved ones
Endowment plans are safe investments. You are guaranteed the returns upfront. At the time of maturity, you receive the assured maturity amount as well as bonus that the insurer may announce every year. In case of your death, your beneficiary receives the Sum Assured. This way, your family is protected if you meet with an untimely demise. If you survive till the maturity of the policy, you get a lump sum amount which can be reinvested.
#2 For Goal-based savings
Invest in traditional endowment plans for some specific goals. For instance, if you want to buy a bigger house, let’s say 15 years down the line, rather than over-leveraging yourself at the time of purchase, you can set aside some money systematically every year which can aid you financially when you eventually make your purchase. It will lessen your burden when you finally reach your goal.
#3 For fulfilment of an investment objective over a longer horizon
If you have a long-term goal like children’s marriage or their education or a foreign vacation or buying a bigger house, endowment plans like Edelweiss Tokio Life Wealth Builder are the best investment avenues. With assured returns, you can plan your purchase as you are well aware of the amount that you would get as lump sum after a certain period. Thus, you can make plans for the future being well aware of your financial receipts from a certain avenue.
All insurance and investment components cannot meet all your objectives all the time. Include endowment plans in your life insurance portfolio as it has its own distinct benefits.