“Save your money. You’re going to need twice as much money in your old age as you think.”-Michael Caine.
Grew up listening to the stories of how our parents and their parents saved money to raise us, feed us, educate us, etc.? This is a fact of everyone’s life and you must have seen our parents struggle through their life to bring peace for us. All this could become possible with money they saved. It is not possible for everyone to save money because of the high cost of living and other expenses. This is why people started buying endowment plans to invest money and save for their future goals. The insurance plan entails zero risk involved in it which is why the insurance product gained relevance.
If you are interested in investing your money for savings, let us explore what an endowment plan is.
Table of Contents
What is an endowment plan?
Best Endowment plan for savings.
How to buy a savings plan?
What is an endowment plan?
Endowment plan is an insurance cum savings policy that provides you the benefit of life cover as well as opportunity to save. The premium paid for the insurance policy is partially invested and the remaining portion is kept in for life cover. If the life insured dies during the policy term, the insurance policy pays the nominee the death benefit.
It is important to know that endowment plans are considered safe because the investment made is low-risk.
Who should buy an endowment plan?
Endowment plans provide a structured approach to developing a corpus that will benefit the insured’s dependents in the event of a financial emergency. People who fall into the category of these people must buy an endowment plan:
- Individuals with a consistent stream of earnings who require a lump payment after a set period of time may consider acquiring endowment plans, according to experts.
- To accomplish their long-term financial goals, small business owners, salaried workers, and professionals such as lawyers and doctors must purchase endowment plans.
Benefits of Endowment Plan in India
These are the benefits of endowment plan in India:
- Endowment plans are low risk plans that provide you guaranteed benefits on maturity.
- The savings policy gives you financial security for your loved ones.
- The endowment policies help you avail the tax benefits.
- The individuals can earn additional bonuses on the endowment policies. These bonuses are declared by the insurance company. The two types of bonuses that the endowment policy will declare include reversionary bonus and terminal bonus.
- The savings plan also provides benefits of riders which implies that the life insured can increase the scope of basic cover. Some of the riders include Accidental death rider, critical illness rider, disability, hospital cash benefit, and waiver of premium.
Best Endowment plan for savings.
If you are convinced to buy an endowment plan, let us see the best recommended plans that you can buy for savings:
- ABSLI Assured Savings Plan:
- ABSLI Assured Savings Plan provides life insurance cover and savings option to safeguard the family members from any financial crises that may arise after an unfortunate event.
- The insurance policy also allows you to accumulate lump sum benefits to fulfil your dream goals.
- The policy provides guaranteed benefits on death or maturity.
- The savings plan comes with the option to get loyalty additions that boost the maturity corpus you are entitled to receive at the end of the policy.
- The insurance policy allows you to cover your spouse under the Joint Life Protection Option.
- ABSLI Assured Savings plan allows you to enhance the cover with the rider covers like ABSLI Surgical Care, ABSLI Waiver of Premium, ABSLI Hospital Care, ABSLI Critical Illness, and ABSLI Accidental Death Benefit Rider.
- ABSLI Savings Plan:
- ABSLI Savings Plan allows you to achieve life goals by enabling you to save regularly. This way the income grows steadily over time.
- The policy allows you to assure a secured financial future to meet their needs.
- The endowment policy gives guaranteed additions for the first 5 policy years.
- The savings plan gives a regular bonus starting from the first policy year.
- The policy gives flexibility to choose the policy term and life cover.
- The savings plan also provides additional sum assured payable in case of accidental death.
- ICICI Pru Guaranteed Income For Tomorrow
- The plan attracts the buyers by saying that they can pay the premium for 7/10 years and get tax-free income for up to 30 years.
- The endowment plan provides life insurance cover for financial security for your family.
- The savings plan from ICICI prudential gives you a guaranteed income to help you save your goals.
- There is an option of taking a loan on this policy when there is a financial emergency.
- HDFC Life Guaranteed Savings Plan
- HDFC Life Guaranteed Savings Plan is a perfect insurance policy for those who want to make small savings to meet bigger expenses in future.
- The insurance policy gives guaranteed maturity value which is disclosed upfront.
- Hassle-free insurance which is based on the Declaration of Good Health.
- There is no need to undergo a medical examination.
- Loan on this savings policy is available.
- Choose the premium payment flexibility for either once, or for 5 or 7 years.
- Max Life Savings Advantage Plan
- The savings plan promotes disciplined savings just like other insurance plans. The insurance policy provides insurance protection to your loved ones against all odds.
- The endowment plan from Max Life Insurance gives flexible premium payment tenure and policy term.
- The savings plan gives guaranteed payment of the lump sum amount on maturity.
- The death benefit under the policy increases post 10 years.
- Under the policy, you can enjoy 110% of the guaranteed sum assured on maturity along with paid-up additions, terminal bonus, and guaranteed additions.
How to compare different savings plans in India?
It is going to be your money which you will put in savings. There are a lot of savings plans available in India. You can choose the best savings plan after evaluating these factors:
- Premium: Decide to buy the savings plan that will fulfil your requirements and at the same time, also fits into your budget.
- The size of the life cover: Gauge the life cover size that the insurance company can offer. Higher the life cover, the better the plan will be.
- Check the claim settlement ratio: Before buying the savings plan from the insurance company, always check for the claim settlement ratio. It indicates the capacity of how much and how fast can the insurer settle the claim.
An endowment plan is a blend of savings insurance policies. The insurance policy also comes with the income tax benefit at the stage of investment as well as withdrawal. The endowment plans are a safe option for the risk averse. The policy will provide financial security to the family in case of any unexpected event. If anything happens to the life insured, the nominee will get the death benefit. But if the life insured survives the complete policy term, a maturity amount is paid. It is a lump sum amount accumulated over a period of time.