An endowment life insurance policy is stipulated to make payment to the insured within a specific period of time, mostly after the insured must have died or when the money matures at a point. Well illustrated as follows:
Endowment life insurance = Term life insurance policy + Savings Plan
What is Endowment Life Insurance?
The term endowment life insurance policy simply illustrates the maturity of the money paid by the insured after a certain period of time, like from 10 – 30 years from the exact time the insured pays for the endowment life insurance plan.
Individual who live to pass the policy maturity date attracts cash value. The actual life insurance death benefit amount still applies to be the same but the amount paid upon the maturity of the endowment policy may be different.
You should know that endowment life insurance is more expensive than the rest of other life insurance policies like the whole life and the term life insurance policies.
Where Endowment Life Insurance Policy can be applied
Individuals who purchase this insurance policy use it for different reasons which are as follows:
- People purchase the endowment life insurance policy in order to make life-saving
- Most individuals also do that as investment
Furthermore, it is worthy to note that endowment life insurance is risk-free in terms of going for it as an investment plan. It poses no investment risk threat. The bad part of the whole policy is that it brings back low returns to the investor.
What you should know
The most important thing to look into when purchasing this insurance policy are the basic factors that affect the premium price as of that very period. The payment made on monthly basis will also depend on the gender, age, and how long you wish to have the coverage.
The death benefit given to your beneficiaries is covered by this part. Then the remaining premium amount stands out to be your investment. So after the period of the investment, the amount you receive is based upon how well the investment did over the past years.
If it was bad, you receive a lesser amount, but if good you will definitely be paid handsomely.
Importance of Endowment Life Insurance
Here are the benefits attributed to purchasing this insurance policy:
- You can as well choose from the investment to know where your money will be located.
- You can also invest when preparing for your family’s future.
- It saves you from future financial troubles.
More so, this insurance policy is best for a particular individual who wants to purchase a life insurance policy. Endowment life insurance can even make you save money for a long period of time so as to cater for a particular event. This is a very good way of investing money and one of the best means of having savings.