An endowment policy can be defined as a sort of life insurance policy that offers you a lump sum on either your death or after the maturity of the policy itself. These policies help you – the policyholder – build a savings corpus without taking any risk at all. It also provides your family with a certain degree of financial security in case of an unfortunate incident. So, endowment policies can be called life cover which provides you with the benefits of a savings plan. Thus, this is the endowment meaning in insurance. In these policies, you can save for a certain period to accumulate a substantial amount of money.
Benefits of Buying Endowment Policies
When it comes to the benefits of endowment policy the first one that comes to mind is that of the financial coverage that you get from these. This is the money that is paid to your nominated beneficiaries upon your death. Apart from that, they provide you with a maturity value, you can add riders to these policies, and you also get tax exemption when you invest in them. The maturity value of these policies makes them so much more than a mere protection plan. Riders help you enhance the coverage that you get from an endowment policy.
How Do These Policies Work?
So, you already know what endowment policy insurance is – now you may be wondering about how they work. Well, there are two ways in which these policies function. The first of them is the death benefit whereby your nominated beneficiaries are paid the sum assured by the policy in case you die while the policy is still covering you. They also offer you a maturity benefit if you outlive the policy coverage period. This sum is assured by the policy as well. Apart from these, such policies offer bonuses and additions.
Endowment plans, especially from the top insurers such as PNB MetLife, have become popular these days. These policies make sure that your capital stays safe for a long time and you are also guaranteed some extra money in the shape of returns. This is why for people with financial goals this is among the best options for saving money in India – they make it easier for them to achieve those goals. They are perhaps the most conventional form of life insurance out there – whenever people think of life insurance it is these policies that they think of.
