April 24th, 2023
Endowment policies offer policyholders both protection and savings benefits. These policies provide a lump-sum payment to the policyholder at the end of the policy term, which can be used to fulfil various financial objectives like buying a home, funding a child’s education, or supplementing retirement income. A typical example of an endowment policy would be one with a term of 20 years and a sum assured of Rs. 10 lakhs. The policyholder would pay premiums for 20 years and, at the end of the term, would receive the sum assured along with any bonuses or returns applicable to the policy.
How does an Endowment Policy Work?
Endowment life insurance policies require policyholders to make premium payments for a specific period. Insurers invest these payments in financial instruments to generate returns. At the end of the term, the policyholder receives the sum assured, plus bonuses and returns. In case of the policyholder’s death during the term, the death benefit is paid out to the nominee.
Endowment policies differ from regular life insurance policies as they provide both a death benefit and a lump sum payout at the end of the term. The premium paid by the policyholder funds both the investments and the death benefit. The premium cost is determined by the term length and benefit amount.
When the policy term ends and the policyholder survives, they are entitled to receive the face value of the policy, either as a lump sum or in instalments. Overall, endowment policies offer investment returns and life insurance coverage, making them a useful financial planning tool.
What is the Difference Between Endowment and Money Back Policy?
The main difference between an endowment policy and a money back policy is their payout structure. An endowment policy pays out a lump sum at the end of the policy term, whereas a money back policy provides regular payouts during the policy term and a lump sum payout at maturity. Endowment policies also include a savings component, while money back policies have lower returns. Additional riders can be added to both types of policies to customize their coverage.
What is the Difference Between Term and Endowment Policy?
The main difference between term and endowment policies is that a term life insurance policy LIC Term Plan Online only provides coverage for a specific period, with a payout only if the policyholder dies during the term, while an endowment policy has a savings component and pays out a lump sum if the policyholder survives the term, in addition to a death benefit if the policyholder dies during the term. It depends on the insurance coverage, financial goals, and needs of the individual to determine which type of plan is the best fit for them.
LIC offers both options, LIC Term Plan and the LIC Endowment Plan are good options. The LIC Term Plan offers a higher death benefit with a low premium and no maturity returns, while the LIC Endowment plan is a combination of risk cover with higher returns. Ultimately, the best choice for you is the one that best meets your goals.
What are Endowment Life Insurance Plans Offered By LIC?
LIC is a leading insurance company in India, offering a wide range of insurance products. Life Insurance Corporation of India (LIC) Buy LIC Policy online offers a variety of endowment plans to meet the diverse needs of its customers.
LIC’s endowment plans, including Jeevan Lakshya, New Endowment Plan, Jeevan Labh, and Jeevan Anand, offer a death benefit, maturity benefit, bonus, and loan facility, with additional riders available for critical illness, accidental death, and disability.
All LIC endowment plans provide life coverage and savings benefits, and policyholders can select the sum assured and policy term as per their needs. Additionally, all plans offer the option to take out a loan against the policy.
What are the Key Benefits of LIC Endowment Plans?
Endowment plans are a popular investment option as they offer savings and protection benefits, including tax benefits under Section 80C and Section 10(10D) of the Income Tax Act.
LIC endowment plans provide a lump sum tax-free maturity benefit at the end of the policy term, double tax benefits, and easy liquidity options like loans or policy surrender. Some plans also offer an additional accident cover, further enhancing protection. Overall, endowment plans are an excellent option for those looking to secure their family’s financial future while also saving for their long-term goals.
What are the Qualifying Rules for an LIC Endowment Plans?
Qualifying for an endowment policy depends on the policy and the insurer, but typically involves meeting age and health requirements and paying premiums. For LIC endowment plans, eligibility conditions include:
In summary, to qualify for an LIC endowment policy, policyholders must meet age and health requirements, pay premiums on time, and may be eligible for loans and surrender after 2 years. The policy provides death and maturity benefits, as well as tax benefits.
Which is the Best Endowment Plan in LIC?
Jeevan Anand & Jeevan Labh are considered the most popular amongst the LIC endowment plans that are most suitable for risk-averse individuals as these are low risk savings-oriented life insurance plan, which helps to create a secured future in case of any unfortunate event, and as well as give you guaranteed returns to secure your long-term financial goals.
Which is the best LIC endowment plan for a child?
The best endowment plan for a child depends on various factors such as financial goals, budget, risk appetite, and investment horizon. LIC Jeevan Tarun Best endowment plan for a child is one of the best plans for children, offering flexibility in premium amount, maturity benefits, and money-back options. The plan also includes a limited premium payment plan, premium waiver benefit, easy liquidity, and triple tax benefits, making it a tax-efficient investment option for parents securing their child’s financial future.
How to Surrender Endowment Policy?
Policyholders can surrender their endowment policy by submitting a written request to the insurer. However, surrendering an endowment policy before the end of the policy term may result in a lower payout than the sum assured.
What Happens When an Endowment Policy Matures?
When an endowment policy matures, the policyholder will receive a tax-free maturity benefit consisting of the sum assured, bonus, and final additional bonus. The maturity benefit can be received in a lump sum or installment payments. If the policy is surrendered before the end of the term, there may be surrender charges and the maturity benefit may not be received in full. The tax-free nature of the maturity benefit is one of the benefits of an endowment policy.
Are the bonuses received from endowment plans subject to taxation?
No, the bonuses earned from participating in endowment policies are not taxable.
Is an endowment policy a risk-free policy?
Yes, absolutely. The endowment plans have no risk component since they are not directly related to any market volatility. These plans ensure risk-free and guaranteed returns which may be helpful for you to create a much-secured corpus.
Is it possible to obtain a loan against an endowment policy?
Yes, the policyholder can avail loan facility against the endowment policy up to 80% of the surrender value. For more clarity on loans, please read the terms and conditions of the policy carefully.
How can I buy LIC Endowment Plans?
Yes, you can buy an endowment plan. LIC, the leading insurance provider in India, now offers the convenience of buying endowment policies online Benefits of buying LIC Policy Online without an agent. Before making a purchase, it is important to understand the features, benefits, and terms and conditions of the policy to make an informed decision.
Endowment policies offer a combination of protection and savings benefits, making them an attractive investment option. LIC offers several endowment plans with a range of features and benefits, and policyholders can choose the one that suits their individual needs and preferences. By understanding the features, benefits, and terms and conditions of endowment policies, you can make an informed decision and achieve your financial goals. And with the option to buy endowment policies online, the process has become even more convenient and accessible.
If you are looking to buy an endowment policy Buy LIC Endowment Plans Online from LIC but unsure of how to do it online, get in touch with us. We can guide you through the process and help you make an informed decision. Don’t let the complexities of buying insurance hold you back from securing your financial future. Take advantage of the convenience and accessibility of online insurance purchases and invest in an endowment policy today.
LIC policyholders enjoy a sovereign guarantee on the sum assured and the bonus declared as per section 37 of LIC Act, 1956 which clearly states that "Policies to be guaranteed by Central Government - The sum assured by all policies issued by the corporation including any bonuses declared in respect thereof and, subject to the provisions contained in section 14 the amounts assured by all policies issued by any insurer the liabilities under which have vested in the corporation under this act, and all bonuses declared in respect thereof, whether before or after the appointed day, shall be guaranteed as to payment in cash by the Central Government."