What factors must one consider while choosing an endowment policy?

When selecting an endowment policy, consider factors such as your financial goals, risk tolerance, policy duration, premium affordability, and the reputation of the insurance provider.

What is the 20 rule on endowment policies?

The 20 rule in endowment policies generally refers to the common practice of allocating 20% of one's savings or investments towards an endowment plan, aiming for a balanced and diversified financial strategy.

Is it good to invest in an endowment plan?

Investing in an endowment plan can be a good option for individuals seeking a disciplined approach to long-term savings, especially those with a regular income and a future need for a significant sum of money.

5 Things You Should Know Before Buying an Endowment Plan

Endowment Plans prove advantageous for those with a steady income anticipating future financial needs, offering a positive and disciplined solution. Non-Resident Indians (NRIs) seeking reliable financial planning can also benefit from the disciplined savings approach provided by an endowment plan.

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Disclaimer: # The investment risk in the portfolio is borne by the policyholder. Life insurance is available in this product. The maturity amount of Rs 2 Cr. is for a 30 year old healthy individual investing Rs 18,000/- per month for 30 years, with assumed rates of returns @ 8% p.a. that is not guaranteed and is not the upper or lower limits as the value of your policy depends on a number of factors including future investment performance. In Unit Linked Insurance Plans, the investment risk in the investment portfolio is borne by the policyholder and the returns are not guaranteed. Maturity Value: 1,06,79,507 @ CAGR 4%; 2,12,15,817 @ CAGR 8%. All plans listed here are of insurance companies’ funds. *Tax benefits and savings are subject to changes in tax laws. All plans listed here are of insurance companies’ funds.

Things to Consider Before Buying an Endowment Policy

Whether you are a first-time buyer or looking to enhance your existing financial strategy, these are the things you should know about the endowment plan:

What Are the Salient Features of an Endowment Plan?

An endowment plan is a versatile life insurance plan designed for Non-Resident Indians (NRIs). It not only provides life coverage but also serves as a disciplined savings tool. By contributing regularly over a specific period, you can secure a lump-sum amount upon policy maturity. This sum can be utilized for diverse financial goals such as funding education, saving for retirement, buying a house, or covering marriage expenses.

In the unfortunate event of the policyholder’s death, the beneficiary receives the full sum assured amount, ensuring financial protection for loved ones. Additionally, the endowment plan offers tax benefits under sections 80C and 10D of the Income Tax Act. It provides goal-oriented savings and the option to avail a loan facility in case of emergencies. Choose an endowment plan for a secure and financially sound future.
Who Should Consider Buying an Endowment Policy?

The endowment policy offers a smart savings solution for individuals who tend to spend freely without maintaining a financial safety net. It becomes particularly valuable post-retirement, ensuring a substantial amount is available when needed.

Any individual, who wants to meet their long-term financial needs, can opt for an endowment plan that provides a dual benefit of life coverage along with saving opportunities.
What are the Right Circumstances of Purchasing an Endowment Plan?

To meet financial goals and ensure stability, NRIs should opt for risk-free endowment plans. These plans serve three key purposes: safeguarding loved ones, achieving financial goals, and building savings for long-term investment objectives. It's advisable to purchase a regular premium plan when there's a steady income to cover consistent payments. Endowment plans are beneficial since this is a long-term plan and provides better returns over a long period of time.
Why Should You Buy an Endowment Plan?

Investing in an endowment plan is a wise choice for NRIs due to its dual benefits. It offers disciplined savings for future financial needs while providing life coverage. Despite potentially lower returns, the plan boasts low investment-associated risks, making it ideal for risk-averse investors. Additionally, the endowment policy allows for tax benefits on returns, making it a preferable option. This plan not only ensures financial security through death benefits but also provides maturity benefits, making it a secure and attractive investment for NRIs. These features make the endowment plan preferable for risk-averse investors as it also provides maturity benefit apart from death benefit offered to the nominee of the policy in case of an eventuality.
What Checklist Should One Keep in Mind While Buying Endowment Policy?

Selecting the right endowment plan involves considering factors like individual needs, income, life stage, and risk appetite. When contemplating a significant investment, comparing quotes beforehand is essential for NRIs. By examining premium rates and company track records, you can make an informed choice. While endowment plans typically offer lower returns than ULIP plans, they are considered safer in the long run. Understanding bonus amounts and checking customer service, claim settlement ratio, and financial stability are crucial for a well-rounded decision. Ensure your investment aligns with your goals and is backed by a reliable insurance provider.

What is the Great Eastern Endowment Plan?

The Great Eastern Endowment Plan is a comprehensive investment solution tailored to the financial needs of Non-Resident Indians (NRIs). As the primary breadwinner for your expanding family, you bear the responsibility of realizing your loved ones' dreams and aspirations. The increasing costs of education and living, coupled with life's uncertainties, the need for strategic financial planning to secure your family's future and ensure a comfortable retirement is important.

The Great Eastern Endowment Plan stands out as an investment plan designed to accumulate wealth throughout your lifetime, allowing you to pass on your hard-earned savings to future generations. This whole life endowment participating plan is crafted to foster savings across three generations, making it the ideal choice for families seeking to preserve and pass down their wealth. While it may not be the optimal fit for conventional short to medium-term savings plans, it excels at generating wealth for you and your loved ones.

This plan offers a range of benefits, including yearly cash payouts and a death payout, providing a strong financial foundation for your family's future. Premium payments can be made through a single payment or extended over 10/15 years. Opting for a single premium payment makes you eligible for a 5 percent discount, enhancing the plan's attractiveness.

What sets the Great Eastern Endowment Plan apart is its flexibility and foresight. The policy allows you to seamlessly transfer the plan to your children once they achieve financial independence, ensuring the continuity of financial security. In the unfortunate event of the second policyholder's demise, the last insured person will receive a death benefit, offering an additional layer of protection.

For NRIs seeking a wealth accumulation and legacy planning solution, the Great Eastern Endowment Plan emerges as the one-stop solution.

Add-ons

The plan also provides an option to add riders that enhance the protection of your cover. The available riders are waiver of premium rider and payer benefit rider.

Wrapping up

In order to avail the maximum benefits of the plan, NRIs should consider all these points while buying an Endowment Plan. Take the time to assess your financial goals, understand the structured benefits of the plan, and ensure it aligns seamlessly with your needs as a Non-Resident Indian. By doing so you can surely choose the most suitable plan for yourself.

FAQ's

What factors must one consider while choosing an endowment policy?

When selecting an endowment policy, consider factors such as your financial goals, risk tolerance, policy duration, premium affordability, and the reputation of the insurance provider.
What is the 20 rule on endowment policies?

The 20 rule in endowment policies generally refers to the common practice of allocating 20% of one's savings or investments towards an endowment plan, aiming for a balanced and diversified financial strategy.
Is it good to invest in an endowment plan?

Investing in an endowment plan can be a good option for individuals seeking a disciplined approach to long-term savings, especially those with a regular income and a future need for a significant sum of money.

Past 10 Year annualised returns as on 01-12-2024

†Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. This list of plans listed here comprise of insurance products offered by all the insurance partners of Policybazaar. The sorting is based on past 10 years’ fund performance (Fund Data Source: Value Research). For a complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website, www.irdai.gov.in

^Tax benefit are for Investments made up to Rs.2.5 L/ yr and are subject to change as per tax laws.

*All savings are provided by the insurer as per the IRDAI approved insurance plan.

Tax benefit is subject to changes in tax laws. Standard T&C Apply
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**Returns are based on past 10 years’ fund performance data (Fund Data Source: Value Research).