What Is an Endowment Life Insurance Policy and Its Benefits

What is Endowment Life Insurance Policy?

The endowment life insurance policy is a very popular type of insurance policy. It might sound a little weird, that in spite of having so many benefits, this insurance policy is not known among many people. Individuals who choose this policy have two understandings. The first understanding is with the lender and the second understanding is with the insurer.

This insurance policy is mostly taken for a period of 25 years or less. The main advantage of this policy is that, when the owner is still alive, he or she gets the entire amount of the policy. 

However, if the owner expires, the beneficiaries are given the amount. There have been cases, where the total amount received has gone double.

One of the main reasons why many people have preferred this policy is because they are charged interest on an annual basis. This kind of policy not only protects the beneficiary, but also the insurer. This is also a perfect policy to take, when individuals want to protect their family members also. 

The benefits of having an Endowment Life Insurance Policy

Each insurance policy or insurance plan comes with their own amounts and benefits.

Given below are some benefits of purchasing an Endowment plan. 

Provides security

It provides security to the person who has purchased the policy. When the person or individual pays the premium amount regularly and follows the terms and conditions of the policy, he or she received the assured benefits when the time period is over. One would be glad to know that the cash value grows quickly in this policy.

Policy can be selected based on the time period

In the endowment life insurance policy, plans can be selected according to the needs of the individual. Supposing the person wants a policy where he or she has to pay premiums for 5 years, then they can purchase that plan. Similarly, if a person wants a policy for 10 or more years, he or she can buy that plan.

Remember, different plans have different benefits. The time period also plays a vital factor in deciding the amount, which will be paid to the beneficiary once the time period is over. The longer the time period of the policy, the higher the amount of money that has been assured. So, if the individual wants to pay for a longer time period, then he or she gets a higher assured amount. 

Tax deduction is provided

Another benefit of purchasing an endowment life insurance policy is that, individuals can avail a tax deduction. Why to lose over the tax when individuals can make use of that amount for a better purpose. 

Ideal policy for children

It is the ideal policy for children because it provides protection from many problems. It provides them financial security for educational purpose and other future needs. Only after you have planned your investments, you would want to purchase the policy. 

Assured amount is paid

Depending on the policy that has been purchased by the beneficiary, they receive the benefits. Supposing in the case of expiry of family members, the policy offers the assured amount and other benefits that have been mentioned in the policy.

There is no doubt, with so many benefits that individuals must get themselves with an endowment life insurance policy.