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What is Endowment Plan

What is an Endowment Plan? Learn who should buy it and how it combines investment with insurance along with the benefits of an endowment plan.<br>

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What is Endowment Plan

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  1. What is Endowment Plan ?

  2. Endowment Plan • What is Endowment Plan ? An insurance plan only offers death benefit at the demise of the policyholder. However, an endowment plan is a unique kind of insurance plan that combines investment with insurance. If the policyholder survives till the expiry of the endowment plan, he/she will receive the sum assured with the bonus as maturity benefit. In case the policyholder dies before the maturity period, the endowment plan will pay the death benefit to the beneficiaries. Thus, endowment policy is a lucrative instrument with dual features of savings and financial protection. Endowment plans come with higher premiums as they yield higher returns in the form of ‘sum assured’ as compared to a standard insurance plan. • At the end of the policy term, endowment policyholders receive maturity benefits. The lump sum amount helps you meet your financial needs and life goals, such as paying for higher education, funding a trip, or purchasing a home or vehicle. The corpus accumulated over the policy's term assists you in meeting your long-term financial objectives. • The endowment plan also protects your loved ones from financial uncertainty in the event of an unfortunate event. Your family is protected from all risks, and the endowment policy protects them from financial difficulties.

  3. Benefits of Endowment Plan • 1.1. Coverage from risks- Endowment plans pay a lump sum in death benefit to the nominees in case any unprecedented event strikes. Hence, your family will be financially secured against any monetary difficulty in your absence. • 2. 2.Maturity benefits- If the policyholder survives through the policy term, he/she is paid the guaranteed maturity benefit. The lump sum amount enables you to meet your long term as well as short term financial needs and aspirations. • 3. 3.Tax Benefits- Endowment insurance is eligible to avail tax benefits under Section 80C of the Income Tax Act, 1961. Premiums paid towards endowment plans can claim tax deductions under this provision. You can also save on tax on the maturation of the policy through this provision. • With its unique dual features and benefits, purchasing an endowment policy is a wise choice for meeting your investment and insurance goals via a single financial instrument.

  4. Thank You

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