Save While You Spend – But How ??
Your salary comes in the first week of the month and you are elated to see the spike in your bank balance 🙂
You rush to the nearest mall, purchase your household groceries for the month and while you are there you decide to watch the latest hit movie playing in multiplex there. Thereafter, you decide to eat at the newly opened restaurant in the food court while your kids play in the kids arcade and slurp on milkshakes and ice creams and your wife shops at the sales in the stores. Life is great !!
Before you realize it a big chunk of your money has been spent on day one itself. By the end of the week you are left with just a minimum balance to pull you through the rest of the month.
Sounds familiar….. however, now you can save even as you spend to insure yourself with Endowment Plans.
What is an Endowment Plan
This is a dual benefit plan offering insurance and savings. It is a life insurance plan which will pay you a maturity benefit at the end of a specified period. This is in the form of a lump sum payment on the maturity of the policy.
The policy holder is eligible for this lumpsum amount if he survives till the end of the policy term and he has regularly paid all the premiums.
It also carries a death benefit In case of the unfortunate event of your passing away during the term of the policy or in other words the policy period.
Endowment plans are traditional plans and are savings based and help accumulate your savings while offering you the protection of life insurance.
Is an Endowment Plan suitable for me
If you are a person who spends mindlessly and finds it difficult to hang onto your savings – YES, it is suitable for you.
If you are a person who has a regular and fixed inflow of funds like a salary, business profits and client payments – YES, it is suitable for you.
If you prefer to play safe with your money and have no risk appetite or knowledge of places like the stock market – YES, it is suitable for you.
If you are person who keeps making small fixed deposits because they are safe – YES, it is suitable for you.
If you are a person who has many dreams and aspirations and will need a substantial risk free amount a few years later in your life – YES, it is suitable for you.
If you are a person who can lock in your savings for a longer duration to enjoy better and higher benefits and bonuses – YES, it is suitable for you.
Why should I buy an Endowment Policy
- Earn returns on your savings
- Disciplined and forced savings – once you take the policy you have to pay the premiums to keep it in force.
- If you survive the policy term you get a lumpsum Maturity benefit
- If you die during the policy term your nominees get the Death benefit.
- It provides protection and financial security to your loved ones in case of your death.
- If you survive you come into a big amount to fulfill your financial goals and aspirations
- It can help you realize your future financial needs
- It is a risk free investment of your money with good returns
- Premiums paid by you are exempt from tax under Sec 80 C of the Income Tax Act.
- The money that you receive on maturity or death is also fully tax free under Sec 10(10D) of the Income Tax Act.
- You can also avail a loan against these policies in case of an emergency.
How do I choose from the different Endowment Plans
This requires a lot of research and choosing between the right plan can be both tiresome and frustrating.
- Check the financial stability of the insurance company
- Study the different plans
- Match your investment objectives with the plans
- Compare the premiums payable on the various plans
- Deliberate on the right rider to include
- Check on the claim settlement ratio of the Insurance company
- Check and compare the bonuses and guaranteed accruals on the various plans
- Visit portals like Bank bazaar, Policy Bazaar, etc to make and review comparisons
- Take advice from persons who have already purchased policies
- Call for the services of your friendly neighbourhood insurance agent 🙂 🙂
To Sum Up
Endowment plans are a good option for the persons who are safe and disciplined investors. They help provide you with financial security while giving you a decent life insurance coverage. In case of your untimely death, your beneficiaries will get the sum assured, thereby giving them a financial stability in that emotionally low point. Endowment plans are a risk averse investment and cash accumulation plans and carry taxation benefits also.
So do not delay and buy that policy now. Edelweiss Tokio Life Insurance has many endowment plans in its basket. The most path breaking and one of its kind are Smart Lifestyle and GCAP.
Do get in touch to know more on this and make an informed choice.
Also read my blog post on Why you need Life Insurance Today