Endowment Policy: Best Reviews & Benefits Online
Both term insurance and endowment plan, offer a life cover. However, there are some differences between the two policies. You will be able to choose the right plan for yourself once you identify the gaps and understand how each insurance plan works. Go through all the details and then select the right kind of life insurance cover for yourself.
- Life Cover
A term life insurance plan is a pure life cover. It is a life insurance plan that promises to pay a sum assured if the policyholder dies within the policy period. If he outlives the term period, there will be no maturity benefit. Term insurance, as the name suggests, is for a specific period and has the lowest premium among all the other insurance plans available in the market. You can select the length of the term for which you want the coverage right from one year up to 35 years.
On the other hand, an endowment plan offers a life cover and also comes with an investment option. A part of the premium you pay will be set aside in a life fund. If you die, your nominee receives the death benefit. The other part will be an investment, and you will earn a dividend out of it. If you outlive the policy period, you get a maturity benefit, unlike a term plan.
- Maturity Value
Under the endowment plan, the sum assured will be provided to the policy holder. This amount is guaranteed right from the start of the policy. However, the final payout provided is comparatively higher depending on the bonuses declared by time to time from the company. The bonuses once said, form a part of the policy are paid out in the event of the death of the policyholder or maturity of the plan.
On the other hand,the term plan does not have any maturity benefits as it does not have any investment aspects. Since all your money is towards insurance, term plans do not offer maturity benefits.
A term plan insurancedoes not offer any return on the premium you pay; it is less expensive than any other policy. You only pay for life insurance.
The endowment plan promises a maturity benefit, along with the dividends you will earn. This benefit adds additional features to the endowment policy, making it more expensive than a pure term insurance plan.
- When to Buy
Every individual needs some risk-free assured investments to make wise use of their money. Endowment plans, therefore, should be bought by individuals to:
- protect and ensure their loved ones, financially
- for goal-based savings
One should purchase such type of regular premium policies only when the policyholder is reasonably sure about a steady flow of income, which would help him/her pay premiums regularly.
While for a term plan, the right time to buy is when you are younger as the premiums are low at that time. Investing in a term planat a young age is better because the premium is lessat this point; there are lesser diseases that surround you. The older you grow, lifestyle diseases show its ugly face, and this is why your premium increases.
- Add on Covers
Riders are additional coverage options which can be included by paying the extra premium amount.
Riders available for term plan insurance are:
- Critical illness
- Waiver of premium
- Accidental death and dismemberment
- Accelerated sum assured
- Partial and permanent disability
For Endowment plan, the following benefits are available:
- Critical Illness
- Accidental death
- Waiver of premium
- Hospital cash benefit
You can buy comprehensive term insurance plans from reputable insurers such as Max Life Insurance at affordable rates. You can also customize the policy according to your needs so that you can create a “mera term plan”for a 360-degree financial coverage of your family.
Term insurance offers a sufficiently large amount to your family in times of crisis to take care of your dependents even when you are not around.