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Financial planning is a constant struggle between instant gratification and long-term goals. In a consumption driven society, instant gratification in the form of unrequired purchases often takes precedence. Excessive consumption, however, can be detrimental for savings and long-term goals. Savings is the base that supports long-term happiness.
The quantum of savings depends on one’s income and financial goals. One can set aside a larger portion of their income when one is young as the responsibilities are lesser. It also takes time to build a corpus through regular savings. A number of financial products are available in the market that can help you earn high returns from your savings. There are market-linked savings instruments that invest your money into equity or debt markets. The returns of market-linked products can be higher but the risk is higher too. On the other side, there are savings products with assured returns like an endowment policy. With investments in an endowment policy, you can plan your future goals with certainty without any risk of negative returns.
An endowment policy is a type of life insurance product that provides insurance cover along with an avenue for savings. It is a mix of insurance and investment. An endowment plan allows the life insured to save regularly for a specific period of time and pays a lump-sum amount at the maturity date. It can be used for wealth creation as well as to fulfil a long-term financial goal. If the policyholder survives the policy tenure, he/she is paid the maturity amount, however, in the case of an unfortunate death of the insured, the policy pays the sum assured.
Diversification of the portfolio is a tested strategy to manage investment risks. To earn optimum returns and ensure the safety of savings, one has to diversify efficiently. Investing in an endowment plan reduces the risk of your investment. It guarantees returns and can be a critical tool for managing risk. Along with investment risk, an individual faces risk to life. An endowment plan insures the financial future of one’s family, in their absence, and covers the risk to life. By investing in an endowment policy, you can eliminate investment as well as life risk through a single product.
An endowment policy is a simple product. The policyholder has to opt for a tenure, such as 10 years, 15 years, etc and has to finalise an annual premium. The policy provides life insurance cover for the agreed tenure and guarantees a lump-sum payment at the end of the term. The lump-sum payment can be used to meet financial goals. Some endowment plans also add amounts known as bonuses at regular intervals, which boost the final returns from the plan.
There are four types of endowment plans—unit-linked endowment plans, with profit endowment plans, low-cost endowment and non-profit endowment plan.
Unit-linked endowment plans: The unit-linked endowment plan is fundamentally different from other types of policies. Under a unit-linked plan the insurance premium is divided into units and invested in market-linked funds. The final return from the plan is dependent on the performance of the fund.
With profit endowment plan: Under the profit plan, the returns are guaranteed from the start and there are no uncertainties. The final payout from the plan is often higher due to the regular bonuses added during the policy tenure.
Low-cost endowment plan: These plans have been introduced with the specific purpose of helping the insured accumulate funds in a specific timeframe. A low-cost endowment plan is generally used to pay back mortgage or loan.
An endowment plan is an essential product for the financial stability of the family. It helps in accumulating wealth as well as ensures financial stability. Let us discuss the various features and benefits of an endowment plan.
Endowment policies are tax efficient investment tools. The premiums paid for an endowment policy are eligible for tax deduction of up to 1.5 lakh per year under Section 80C of the Income Tax Act, 1961. The amount received on the death of the insured or at the maturity of the policy is exempt from taxes under Section 10(10D) of the Income Tax Act.
One should buy an endowment policy to systematically save for the future. It helps in accumulating long-term savings in a disciplined way. Additionally, an endowment policy offers life insurance cover. You get risk-free returns along with life insurance cover with an endowment policy. An endowment policy ensures death benefit, maturity benefit and also tax benefit.
Before investing in an endowment policy, you should understand what an endowment plan is. Though it is classified as an insurance product, it is used as a long-term savings tool. One should evaluate an endowment policy on several parameters before buying one.
There are two types of endowment plans at Finserv 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 |
|
|
Waiting Period |
90 Days |
No Waiting Period |
Exclusions |
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 Finserv MARKETS online.
An endowment plan has a variety of benefits. But the smooth functioning of an endowment plan also depends on the credibility of the insurer. Just like other financial products, the reputation and trustworthiness of the insurer is very important in the case of endowment plans. When you buy an endowment plan on Finserv MARKETS, you can rest assured of the credibility of the insurer. Here are a few more reasons to choose the endowment plan available on Finserv MARKETS.
Instant policy issuance: It is very easy to invest in an endowment plan on Finserv MARKETS. You can purchase an endowment plan in a series of quick and easy steps online.
High claim settlement ratio: One should not forget that endowment plans are insurance products and provide life insurance cover. If your family struggles to get the death benefit in your absence, it would defeat the purpose of the plan. Bajaj Allianz Life is a trusted insurer and has a high claim settlement ratio. With endowment plans available on Finserv MARKETS, you can rest assured of a quick settlement.
Minimal paperwork: Buying an endowment plan on Finserv MARKETS is a hassle-free process and requires minimal paperwork.
One just requires an age proof, photograph, address proof and a correctly filled application form to invest in an endowment plan. All the documents can be submitted online if you buy a policy on Finserv MARKETS.
The claim process of an endowment plan is similar to other insurance products. One should inform the insurer as soon as the policyholder dies. The insurer sends a claim form to the insured after getting informed about the demise.
The claim form has to be filled and signed by the nominee or the legal heir to receive the death benefit. The doctor who last treated the insured has to provide the loss statement. Additionally, the hospital authorities have to issue a certificate. The statement of a witness who was present during cremation has to be given along with the death certificate. For speedier processing of the claim, the nominee should provide
Post-mortem certified copy, police investigation report and copy of the FIR in the event of an unnatural death.
If the insured was working in an organisation, one should submit the employer’s e-certificate.
2 reviews
With guaranteed benefits and least market risk, an endowment plan was my first choice for investment. With such an endowment policy, which I got through Finserv MARKETS, I could save for my future and my family’s aspirations, all together.
Posted on 22 Feb 20
With increasing responsibilities, my income and savings kept falling short. That’s when a relative suggested that I invest in an endowment policy. I visited Finserv MARKETS from where I recently got an instant loan and purchased the endowment plan that not just offers assured benefits, but also comes with low risks.
Posted on 06 Mar 20