Who Needs an Endowment Plan?

Who Needs an Endowment Plan?

The concept of financial planning for future has been in the spotlight for a few decades now. As many different options of investment and savings are being made available in the market, more people have had a change of mindset about how they should handle their money.

 Gone are the days when it was all about depositing them in accounts and gaining interest. Different financial instruments offer better benefits to everyone. One such instrument is the endowment plan. With an increased interest in this plan, one question does arise: who should invest in this plan? 

Read on to know why you should invest in it and how it can benefit you.

What is an endowment plan?

An endowment plan is a type of life insurance policy that offers dual benefits of investment and insurance. The maturity benefits you receive from your investment will help you and your loved become financially independent without the risk of any instability. The insurance part provides financial coverage to your loved ones from various life risks in your absence. 

If you survive the term of the plan, you will get full maturity benefits. However, in the event of an unfortunate demise, your loved ones would get death benefits from the insurer. Once the policy matures, they would also receive the full maturity benefits. 

Who should purchase this plan?

Endowment plan has universal benefits for everyone. You should invest in it if you are planning:

  • For the future of your children

As a parent, your main concern would be the financial well-being of your children. The education, the health and the future of their child are the utmost priority for any parent. While your income might help you provide them with the best when you are working, this might not be the case in the event of a sudden demise. Your child could be left facing an uncertain future. If there is not enough money saved, it could hamper their education.

Endowment plans offer death benefits for your loved ones. This money will help your children in completing their education. If they have plans to go abroad, this amount can help them fulfil that dream. Also, this money could be used for their wedding as well.

  • For your retirement

When you retire, you do not have any active source of income. Most people tend to rely on their savings after they retire. This is not a wise choice as your savings could get depleted, if there are any emergencies. When you invest in endowment plans, you have the option of investing your money and gaining returns. This helps in increasing your wealth. This added wealth can prove to be a financial cushion upon your retirement. If you survive the term, you will receive full maturity benefits to have a financially safe retirement.

  • To secure your partner’s future

After marriage, the added responsibility of your partner changes the way how your money is spent. Especially if you are the sole earner. Savings, simply, would not be enough for your partner to stay financially afloat in your absence. With no other source of income, your partner would be forced to take a loan or borrow money to manage expenses. To avoid these adverse situations, investing in endowment plans is imperative. The death benefits your partner would receive will help them be financially independent. You can use the life insurance calculator to see how much money you should invest for your partner’s financial well-being.

These are some of the things to consider before buying an endowment plan for yourself and your loved ones. The needs may be different for many, but the benefits for this plan are the same — the main benefit being financial assistance in your absence. You can get in touch with your insurance advisor to get more information about the types of plans, their pricing, tenure, and more, before you purchase one.

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