Endowment Plan is Saving cum Life Insurance Plan. The Plan provides a lumpsum payment of Sum Insured once the policy holder dies or when the policy matures on completion of term selected alongwith the accrued bonuses.
Q2 – What is main benefit ?
Besides safety and security, policy maturity term can be selected as per individual needs like marriage of daughter or education of children. This gives great mental relief.
Q3 – What other benefits are there ?
Generates financial resources by regularly collecting premiums and the funds so collected are gainfully employed in industrial development of the country.
Promotes economic growth by mobilizing domestic savings.
Provides Tax-Saving vide Section 80 (C ) of Income Tax Act, 1961 to individuals & HUF.
This is an easy way to make old age provision or housing provision at later age.
Q4 – What are the disadvantages ?
Being long term – regular savings are somewhat difficult.
Return is low to the tune of 5-6% Only.
If one breaks the payment in between the term, the money deposited is blocked upto the end of the policy term.
There is up and down in man’s Life and as such there are chances of policy lapsation being a long term regular saving plan.