Guide for endowment policy
Broadly speaking, endowment policies are of two types - profit-based endowment policies and non-profit based endowment policies. In endowment policies without profit, the nominee is paid only the sum assured in the event of the demise of policy holder. In case of endowment policies with benefit, the nominee is paid the sum assured as well as the bonus for the number of years the policy was in effect. An endowment policy offers guaranteed payment, irrespective of the maturity of the plan or the demise of the policyholder. Thus, an endowment policy is highly beneficial as it offers the combined advantage of guaranteed policy benefits and bonus (bonus is a non-guaranteed entity herein).
On the whole, an endowment policy has added advantages of being financial support coverage for your family in your absence. Besides, it comes with tax benefits and given its guaranteed benefits, is a low risk option. Apart from the regular features of insurance, there are Unit-linked endowments, which are investments where the premium is invested in units of a unitized insurance fund. Units are later encashed to cover the cost of the life assurance. Policyholders can often choose which funds their premiums are invested in and in what proportion. Unit prices are published on a regular basis and the encashment value of the policy is the current value of the units. To "endow" signifies giving and that is what these plans are meant to do give benefits that are guaranteed.
Endowment policy and additional bonus: An insurance company offers various kinds of bonuses in general. Specifically speaking about endowment policies, the insurer pays bonus as an extra amount in addition to the policy proceeds. However, to avail of a bonus, the policy holder must have a "with profit" endowment policy running and besides, the bonus is subject to the availability of funds in a given financial year after claims, costs and any additional expenses, if applicable. These bonuses are differentiated into Reversionary bonuses and Terminal bonuses. Reversionary bonuses are the additional monies added to the amount payable at death or maturity of the "with profit" endowment policies. Once made, it cannot be withdrawn if the policy matures or in the event of death. A terminal bonus is a discretional, non-guaranteed amount that is added to the payment made at the maturity of the policy or the death of the insured.
HDFC Life offers term insurance plans to best meet your needs and cover the financial corpus of your family. For details, click on the mentioned link: https://www.hdfclife.com/term-insurance-plans
Term Plan Articles
Investment Articles
Tax Articles
Retirement Articles
ULIP Articles
Subscribe to get the latest articles directly in your inbox
Health Plans Articles
Child Plans Articles
Popular Calculators
Here's all you should know about life insurance.
We help you to make informed insurance decisions for a lifetime.
HDFC Life
Reviewed by Life Insurance Experts
HDFC LIFE IS A TRUSTED LIFE INSURANCE PARTNER
We at HDFC Life are committed to offer innovative products and services that enable individuals live a ‘Life of Pride’. For over two decades we have been providing life insurance plans - protection, pension, savings, investment, annuity and health.
Popular Searches
- Term Insurance Calculator
- Investment Plans
- Investment Calculator
- Investment for Beginners
- Best Short Term Investments
- Best Long Term Investments
- 5 year Investment Plan
- savings plan
- ulip plan
- retirement plans
- health plans
- child insurance plans
- group insurance plans
- income tax calculator
- bmi calculator
- compound interest calculator
- income tax slab
- Income Tax Return
- what is term insurance
- Ulip vs SIP
- tax planning for salaried employees
- HRA Calculator
- Annuity From NPS
- Retirement Calculator
- Pension Calculator
- nps vs ppf
- short term investment plans
- safest investment options
- one time investment plans
- types of investments
- best investment options
- best investment options in India
- Term Insurance for Housewife
- Money Back Policy
- 1 Crore Term Insurance
- life Insurance policy
- NPS Calculator
- Savings Calculator
- life Insurance
- Gratuity Calculator
- Zero Cost Term Insurance
- critical illness insurance
- itc claim
- deductions under 80C
- deductions under 80D
- Whole Life Insurance
- benefits of term insurance
- types of life insurance