5 min read
Updated on Apr 24, 2023
It is often seen that most people see life insurance as a liability and do not view their premium payments as an investment in their future. Even policies such as online term insurance that go a long way in protecting the financial well-being of your family at a minimal investment, often miss on providing any survival benefit. That is the reason why a pure endowment policy is a perfect option for customers looking for an element of saving money through their insurance plan. A pure endowment plan helps us in building a corpus for our future financial needs. Let us understand it in greater detail.
Simply put, a pure endowment plan aims to provide the policyholder with a predetermined amount if the policyholder survives beyond the policy term. There are no beneficiaries and no amount is payable if the policyholder loses their life during the policy period. As it does not provide any coverage for the policyholder’s life, it is considered unlawful by most judiciaries as a standalone policy; however, can be allowed if paired with a policy providing life cover.
To be eligible for the payment, you should pay your premiums on time without any failure during the term of the policy and live till the end of the specified duration of the policy. One thing to keep in mind is that without any death benefit if the policyholder passes away before the tenure of the policy is over, the family of the policyholdpure endowment planer will not receive any compensation. That’s why many insurance professionals advise buying a pure endowment assurance plan along with a conventional term plan or any other life insurance policy that comes with a death benefit. While the other policies may enable you to preserve the financial future of your family after your death, a pure endowment plan is focused on saving a small amount for your upcoming financial goals.
Another benefit of a pure endowment plan is that it will help you in maintaining financial discipline. The funds that you will receive at the end of the policy term can be used for several things, which include the education of your child, marriage, or even paying off your debts.
Also Read: HDFC Life VS ICICI Prudential
Mentioned herein below are some of the features that you should know about a pure endowment insurance plan.
A pure endowment policy can be called a risk-averse insurance policy. Nevertheless, before you put your money, you need to be aware of the fact that a pure endowment plan may not be enough for providing coverage for the needs of your insurance. It does not provide a big return on your investment due to lower return rates. When you are taking a term life insurance plan, you may be offered to add a pure endowment plan so that you can at least receive your premiums if you survive the policy term.
Also Read: What is Online Insurance
There are several types of pure endowment plans, and you can find them online. All that you need to do is to check out all of them online and choose the one that suits your needs. Used well, a pure endowment plan can make your life insurance policy more comprehensive and help you read benefits when you outlive the life insurance policy term.
Also Read: Endowment Plan vs Money Back Plan
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