What Is An Endowment Plan?

 


Malcolm X once said, “The future belongs to those who prepare for it today”. Rings true because while we spend most of our lives worrying for the future, turns out, preparing for it is not as tricky. We spend majority of our lives saving so as to prep ourselves for the future; however the amount we would end up accumulating won’t suffice if it stays tucked in a corner in a safe (not to mention inflation). Hence, it is critical to invest in an endowment plan so as to make that money work for us beyond what we save.

  • What is an endowment plan?

 An endowment plan is an insurance saving plan that can provide guaranteed savings. In simpler words, an endowment plan is basically a saving plan that is clubbed with a death benefit.

  • Payment of premiums:

Typically, you can choose between two kinds of premiums that you would need to pay for an endowment plan:

  • Single or lump-sum premium:

Under this kind of premium, you will need to pay a lump sum premium in one shot when you buy the plan.

  • Regular premiums:

In the case of regular premiums, you have to make regular payments during the payment term of the plan you have opted for. You can also choose to finish paying the regular premiums before the plan reaches its maturity.


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