It seems like everywhere you look, there are commercials and advertisements about endowment and savings plans. You may be wondering what all the fuss is about and whether or not these plans are a good investment for you.
In this blog post, we will discuss the benefits of endowment and savings plans and why they have become so popular in recent years. So, if you’re wondering whether or not an endowment or savings plan is right for you, then read on!
An Overview of Endowment Plan
Endowment plans are a type of life insurance plan that offers you a combination of both a savings plan and an insurance cover. With this plan, you can save money regularly over a period of time, usually between five to 20 years. The money you save is then used to provide you with a lump sum payment at the end of the policy term.
On a fixed date, the policyholder receives the sum assured, which is the amount of money that was set when the policy was purchased. If the policyholder dies before this date, their beneficiary will receive the sum assured.
Reasons why Endowment and Savings Plans are Growing in Popularity
There are a few reasons for this growing popularity.
1. Provides Insurance Cover
One of the main reasons why people are drawn to endowment and savings plans is that it provides insurance cover. This means that in the event of death or total and permanent disability, your loved ones will be financially taken care of.
2. Has a Dual Purpose
An endowment policy not only provides insurance coverage but also grows your money. This is because a portion of the premiums you pay goes into a savings account, which earns interest over time. The sum assured plus the accumulated savings can be used to pay for your child’s education or other future goals.
3. Lump Sum Payout
Most endowment and savings plans will offer you the option to receive your benefits in a lump sum. This means that you will get all of the money from your plan in one payment. This can be a good option if you need the money right away.
4. Low-Risk Investments
Endowment and savings plans are low-risk investments. They offer a guaranteed return on your investment, which makes them appealing to conservative investors. Additionally, these types of investments are not subject to the volatility of the stock market. This makes them ideal for people who want to save for retirement or other long-term goals.
5. Long-Term Savings
The beauty of an endowment or savings plan is that it’s a long-term investment. Over time, the value of your investment is likely to grow.
6. Offers Option to Add Riders
Riders are additional features that can be added to an insurance policy for an additional cost. Riders typically provide extra protection or benefits not originally included in the policy. For example, a rider might provide coverage for accidental death or dismemberment, or it might increase the death benefit of the policy. Some riders can even help to pay for long-term care expenses.
The Bottom Line
Endowment and savings plans are becoming more popular because they offer a great way to save for the future. These types of plans also offer tax benefits and can provide income after retirement. If you’re looking for a way to save for the future, then an endowment or investing in a savings plan may be right for you.