A policy that combines the benefits of both the concept of saving with the concept of life insurance is called as endowment life insurance policy. Unlike pure term insurance both death and maturity benefit is provided in these policies. Numerous LIC endowment plans comes with a value know as surrender values according to which the amount payable to a person who surrenders a life insurance policy is the certain percentage of the premium paid. With no upper limits the death benefit which is the sum assured under the policy starts with 50,000. Using various add-on coverages that provide additional benefits to the insured in case uncertain death, accident or any type of emergency situation the endowment plan can change or can be enhanced. The LIC endowment policy offers by LIC provides additional benefits too: For example, some while participate in company’s profit the other LIC plans generate savings through investment in the equity market. The new endowment plan by LIC is a participating endowment plan. It is not that complexed plan as a simple plan the new endowment policy offers death and maturity benefits. Important Features of LIC Endowment Plan
Benefits offered by LIC Endowment Plan Bonus- This LIC endowment plan is a participating policy that provides you with a share of the company’s profits. The bonus amount received by the insured is calculated on the basis of final addition bonus and simple reversionary bonus. As this bonus amount depends on the profit made by LIC, there is no minimum and maximum amount that you can receive as a bonus on this policy. Maturity Bonus- If the policy holder survive till the end of the policy term, the accrued bonus plus the total sum assured on death is paid to the policy holder as a maturity benefit. After the maturity benefit is given to the policy holder then the term of the policy expires. Death Benefits- The death benefit is provided to the beneficiary in case when the policy holder dies an uncertain death in between the time period of the policy term. In death benefit the accrued bonus and addition with the sum assured on death is payable to the nominee of the policy. The sum assured on death is defined as
Should You Go for Endowment Plan One should think more sincerely while taking on an endowment plan. Prior to zeroing in on a policy the insured should know well the benefits offers by policy, return on investment, etc. in order to choose the best plan one must compare the different endowments plans online and choose the policy that covers all benefits in the affordable price. An individual can expose themselves to the risk involved in the mutual fund investment, if they purchase a life insurance policy and invest in separate mutual fund. The endowment policy is much less risky than a mutual fund investment. The policy also has ULIP option which invest in various equity and depth scheme. The policy also provide a comprehensive life insurance coverage in addition of tax saving investment with guaranteed return at the end of the term. Although according to the research the argument is there the endowment plan offers less return on investment as compared to the mutual fund. While purchasing the policy it must be noted that as there are better options of returns on investment, the endowment policies are first insurance policies which add benefit to the insured on return of the premium you have invested. Exclusions- Only 80% of the premium paid are returned to the nominee in case of suicide committed within the 12 months of policy inception. The acquired surrender value or higher of 80% premium is paid in case of suicide within 12 months of the revival. In order to purchase the policy the insured need to keep handy with document like application form/ proposal form, address proof along with the medical history and other KYC documents. In some of the cases the medical tests are required and the age of the person based on the sum assured. In case of an emergency 30 days grace period is allowed for the premium payment. In case of the failure of the payment the policy will lapse. From the due date of the first unpaid premium for the policy to be revived there is a period of 2 years. After completion of 3 policy years the policy acquires a surrender value and can also avail Loan.
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