What is Endowment Life Insurance
Image by storyset on FreepikWe all know very well that earning is very important for survival and saving is very important to meet future needs. Now, if you are performing both these tasks properly, then Life Insurance is very important for the protection of your movable and immovable property, the financial future of your family and the savings you make continuously.
Because if you die, due to lack of Life Insurance, first of all your family may have to face financial crisis, your children's future may be ruined, your movable and immovable property may be destroyed and your savings may be lost. Therefore, buying the right Life Insurance Policy is a very essential responsibility for every person.
Now when it comes to Life Insurance, a common person is unable to decide which Life Insurance Plan will prove to be best for him? That is why Jeevan Bima Bazaar is publishing information about all types of Life Insurance to you through its articles.
In the previous chapter of Jeevan Bima Bazaar, the topic of Term Life Insurance was explained in detail and in today's new chapter, the topic of Endowment Life Insurance is being explained. We would like to tell our readers to read all its pages carefully to get complete information about Endowment Life Insurance.
At the end of each article, the facility to go to the next and previous pages is provided. So definitely get its benefit.
What is Endowment Life Insurance:
To understand Endowment Life Insurance, you need to know both Savings and Life Insurance. Well, I am sure you are well aware of savings. Saving simply means saving money. But if you save your money under different types of banking rules, then you get some interest along with the money you save.
Let me try to explain Life Insurance with a brief example. You say to the Life Insurance Company, "I want you to pay Rs 25 lakh to my family if I die within the next 20 years." Then the insurance company says, "I accept your condition but for this you will have to deposit ₹ 5000 per month in our company."
Now if both of you (you and the Life Insurance Company) agree to this condition, then this rule is known as Life Insurance. At present it is called Term Life Insurance, which has been explained in the previous chapter. In this type of Life Insurance, the customer's family benefits only if the customer dies within 20 years. But if the customer survives for 20 years, he does not receive any benefit in exchange for all the premiums he has deposited in the Life Insurance Company.
Now let us understand What is Endowment Life Insurance?
Endowment Life Insurance Plans, are actually a type of Life Insurance that offers the benefits of Life Insurance Plans along with the benefits of Savings Plans.
This means that in Endowment Plans, on maturity of the policy, the customer gets the premium deposited by him and some special benefits along with it. But if the customer dies before the maturity of the Life Insurance Policy, the Life Insurance Company pays the entire Sum Assured to his family.
Example: Suppose you decide to buy an Endowment Life Insurance Policy with a sum assured of Rs 25 lakh and the policy term is 20 years. Now imagine that a Life Insurance Company demands a premium of ₹ 10 thousand per month for such an Endowment Life Insurance Policy.
That is, if you deposit a premium of ₹ 10 thousand per month for the next 20 years in this imaginary Life Insurance Company, then this Life Insurance Company will provide you a death benefit of Rs 25 lakh for the next 20 years under the Endowment life Insurance Plan.
Now if you buy such an Endowment Life Insurance Policy, you will definitely get one of the two benefits given below.
Maturity Benefit: If you survive for the next 20 years (i.e. till the Maturity Date of the Policy), the Life Insurance Company will pay you the maturity amount of your Endowment Life Insurance Policy. Which will be much more than the total premium paid by you.
Death Benefit: If you die before the Policy Term (ie the next 20 years), the Life Insurance Company will pay an immediate amount of ₹25 lakh to your family.
Note:This article of Jeevan Bima Bazaar does not contain exact calculation of Sum Assured, Policy Term, Premium and Maturity. The basic objective of this article is only to give broad information about Endowment Life Insurance. So that you can understand how Endowment Life Insurance can actually prove beneficial?
Conclusion:
Endowment Life Insurance is a better option for those who want to get the benefits of Savings Plans along with Life Insurance. Most people prefer to Buy Endowment Life Insurance to meet their important needs like children's education, marriage, retirement, etc.
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