Q1 – What is Endowment Plan ?
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.