An endowment policy is a form of life insurance that also offers an avenue for reliable savings over the duration of the policy. When a policyholder buys and pays the premium for an endowment policy, a portion of the fund goes towards the life insurance premium and the other half is allocated as savings. An endowment plan is an excellent way to save money regularly over a period of time while also getting life insurance coverage.
The main benefit of an endowment insurance policy is that if the policyholder survives the duration of the policy period, the full amount of money invested in the policy is returned to the insured in the form of maturity benefits along with any bonus if applicable. In case of the untimely death of the policyholder while the endowment plan is still active, the sum assured is provided to the beneficiary in the form of death benefit along with any bonus if applicable.
There are many types of endowment plans available in the market to address the different needs of customers. Let’s take a look at the types of endowment plans available and their functions:
Under a Guaranteed Endowment Plan, the policyholder will receive guaranteed benefits at the end of the policy term to the amount of sum assured and any additional bonus if applicable. The beneficiary will also receive the same in case of the untimely death of the policyholder while the policy is still active. A Guaranteed Endowment Plan is a good option for people looking for safe and dependable coverage without any risk.
Under the With Profit Endowment Plan, the sum assured amount is the same as the death benefit and is provided to the policyholder at the end of the policy term. This sum assured is pre-decided at the time of buying the policy. Moreover, the final payout to the policyholder at maturity is higher than the sum assured as the insurance company also adds bonuses during the active policy period.
Under a Non-Profit Endowment Plan, the sum assured amount, which is the same as the death benefit, is paid out to the policyholder/beneficiary as maturity benefit or death benefit. However, under a Non-Profit Endowment Plan, the policyholder will not receive any additional bonus.
Low-Cost Endowment Plans are made specifically with the purpose of helping the policyholder accumulate funds under a specific time period of time, which are paid out at the end of the policy as maturity. If the policyholder or the insured passes away while the policy is active, the accumulated funds are paid to the beneficiary as the death benefit. These funds are often used to pay off mortgages or other loans.
There are two types of endowment policy available at Bajaj Markets online. Take a look at the table below to understand the two plans:
POS Goal Suraksha
Guaranteed Income Goal Endowment Plan
About the policy
Bajaj Allianz Life POS Goal Suraksha allows you to build wealth and secure your savings for the future.
Bajaj Allianz Life Guaranteed Income Goal allows you to enjoy guaranteed benefits either in terms as a lump sum or in instalments.
Features and Benefits
No Waiting Period
Suicide Exclusion: If you (the policyholder) dies due to suicide within the first year of the plan or the date of policy renewal, they will receive the highest of 80% of the total premiums paid.
Suicide Exclusion: Similar to POS Goal Suraksha, if you (the policyholder) dies due to suicide within the first year of the policy, then they shall receive the highest of 80% of the total premiums paid.
You can read in detail about both these plans by visiting us at Bajaj Markets online.
Following are the main features of an endowment that you should know:
In case of the death of the policyholder while the policy is active, the sum assured along with any additional bonus, if applicable, is provided to the policyholder’s family/beneficiary as the death benefit.
As mentioned above, one of the most important features of an endowment plan is the investment and savings aspect. An endowment plan allows you to save money for the future while providing life insurance cover at the same time.
In case you live through the whole duration of the policy, the sum assured along with any additional bonus will be paid to you as the maturity benefit.
At the time of buying the policy, you will have the option to choose the frequency of your premium payments. You can choose to pay your premiums yearly, semi-yearly or quarterly.
You can also choose to add extra riders over your basic endowment policy for enhanced protection. Riders such as accidental death cover, critical illness cover, etc. are a good way to get any specific coverage you may need at affordable rates.
Investing in an endowment plan provides a host of tax benefits. The premiums paid are eligible for tax deduction under Section 80C of the Income Tax Act, while the payout is tax-exempt under Section 10(10D) of the law.
Choosing an endowment plan ensures that your savings remain secure as investments and are returned to you after the policy period ends.
Many endowment plans also have a provision for bonuses where the insurance company adds bonuses to the policyholder’s investment, thereby providing a higher return.
An endowment policy is a unique plan in the sense that it fulfils two purposes- provides life insurance cover and serves as a tool for savings/investments.
The returns from an endowment plan are guaranteed and the risk is minimal. A majority of endowment plans are not market-linked and are hence unaffected by market fluctuations.
There are many reasons why you should consider investing in an endowment plan. Given below are some of the main reasons as to how an endowment plan will be helpful for your future:
As a part of the premiums you pay towards your endowment plans are savings, you will have a healthy nest egg of savings/investments at the end of your policy term. As a combination of life insurance and savings, an endowment policy serves as a great way to save your money over time with discipline.
Apart from being a tool for saving money, an endowment policy also serves as a life insurance policy providing financial coverage to your family and loved ones in the case of your untimely demise. In case the policyholder passes away while the policy is active, the sum assured along with any bonuses(if available) is paid to the beneficiary as the death benefit.
The lump sum amount paid at the end of the policy period as maturity benefits can serve to supplement your retirement funds significantly. The funds can be used post your retirement in multiple ways, such as travel, funding your children’s education, medical bills, etc.
An endowment policy can be purchased by anyone who is of an eligible age as an investment and life insurance cover. However, the following people should especially consider buying an endowment policy:
As mentioned previously, the money invested in endowment plans is extremely low risk and remains secure. People who are looking for a way to securely save money for their future can buy an endowment plan to achieve their goals.
It is often suggested that life insurance should be purchased early in one’s career. Young people in their 20s and 30s should invest in an endowment policy as their premiums will be lower and they can save up a significant amount of money by the time their policy period ends.
People who are looking to buy a life insurance plan to protect their family and loved ones can also buy an endowment plan as it provides the added benefit of savings along with life insurance cover.
The premiums you have invested in an endowment plan will create a healthy financial safety net for your retirement.
Anyone who is in the eligible age range can buy an endowment policy. However, people who are in their 20s and 30s will receive the most benefits. At a younger age, the premiums they will have to pay for life insurance will be reduced, whereas the savings they accumulate will grow extensively year by year, creating a healthy corpus of wealth for them at the end of the policy. However, people who are in their 40s and 50s can also buy an endowment plan to supplement their savings and get insurance coverage to protect their families and loved ones financially.
While each insurance company may have separate requirements in terms of paperwork, you will need the following documents to apply for a new endowment plan at any company:
Birth Certificate/Age Proof
Proof of Residence
Proof of Income
Duly filled application form to be submitted to the insurance company
Following are the main factors you should keep in mind before buying an endowment policy:
An endowment policy is a long-term investment product and helps in accumulating wealth over several years. It is advisable to start early to boost the final corpus as the power of compounding works over the long term.
Payment of premiums on time is a key requisite to receive the entire benefits from an endowment policy. Before investing in a plan, inquire about the premium payment term. Policies for salaried employees have monthly payment terms, while people with irregular income can avail single or yearly premium payments.
There are various types of endowment policies. It is important to know the type of policy before opting for one. You should research the types of endowment plans given above and choose the appropriate one as per your needs.
You can choose to enhance the insurance coverage of an endowment policy by choosing a critical illness rider or an accidental death rider. Choose a policy that offers a wide variety of riders so that you can customise it as per your requirements.
Some endowment plans add to the savings by paying regular bonuses. The bonuses are paid from the profit that the insurer makes by investing the amount paid as premiums. Choose a policy that pays bonuses as they offer higher returns.
Not all endowment policies guarantee returns. Some plans have a component of guaranteed returns and some are with non-guaranteed returns. Know about the policy in detail before investing.
An endowment policy is a simple product. The policyholder has to opt for a policy period, such as 10 years, 15 years, etc. and has to finalise an annual premium. The policy provides life insurance cover for the agreed tenor and guarantees a lump-sum payment at the end of the term. The lump-sum payment can be used to meet your financial goals. Like you have read above, some endowment plans also add amounts known as bonuses at regular intervals, which boost the final returns from the plan.
The claim process for an endowment life insurance policy is fairly straightforward and quite similar to that of a life insurance policy. Here are the steps to claim an endowment policy:
In case of the death of the policyholder/insured, the beneficiary will need to apply to the insurance company for the claim.
The beneficiary will need to submit all the relevant documents such as the policy papers, death certificate and other documents as asked by the insurance provider.
Once the claim application and the documents have been successfully submitted, the insurance company will investigate to verify that the claim is legitimate and there is no foul play. This process generally takes about 6 months.
Once the insurance company has verified the claim request to make sure everything is in order, the sum assured along with any benefits, if eligible, will be paid to the beneficiary as the death benefit.
An endowment plan protects you and your family financially; however, it is important that you buy one from a reputed and reliable source. When you buy an endowment plan on Bajaj Markets, you can ensure that you are dealing with one of the leading financial services firms in the country and that your investments are fully secure. Here are a few more reasons you should choose to buy an endowment plan available on Bajaj Markets:
Buying any policy through Bajaj Markets is swift, safe and easy. You can buy an endowment policy in a short amount of time by following a series of straightforward steps online through the Bajaj Markets website.
One way to measure the reliability of an insurance company is through its claim settlement ratio. A higher claim settlement ratio is an indicator that the insurance provider is legitimate and trustworthy. Bajaj Allianz Life is a trusted insurer and has a high claim settlement ratio. With the endowment plans available on Bajaj Markets, you can enjoy a quick settlement.
Buying an endowment plan through Bajaj Markets is a hassle-free process with no complications and minimal paperwork.
Now that you know an endowment insurance policy offers financial security to your loved ones, tax exemption to you, and a goal-based savings option, head over to our ‘Insurance’ page and check out the plans now.
An endowment policy provides the following major benefits:
Life insurance cover
Endowment insurance plans are a good choice to invest in if you are looking for low-risk savings along with the added benefit of life insurance cover.
Maturity benefit refers to the sum assured along with any bonus the policyholder will receive at the end of the policy period.
A term plan is a basic life insurance policy that provides a sum assured only in the case of the death of the policyholder/insured. There is no option for investment or savings in a term plan and no maturity benefit. On the other hand, an endowment plan provides sum assured as life insurance along with savings and maturity benefits.
You should take a look at all the endowment plans available online. Compare the prices and features offered by different companies, and then choose a plan that suits your requirements.