By : Kumar Shukla
Endowment plans were very popular in the past mainly because there were hardly any options available in the market. The popularity of such policies could also have been because of the guaranteed returns assured by the insurance providers. But with time this type of policy has lost its popularity with so many players in the market and new innovative products have taken over the insurance industry by surprise.
Endowment Plan is a type of Life Insurance policy where the premium paid is partly divided to secure your life and partly for investment purpose to generate revenues. The insurance companies in this reference act like brokers to you, they invest your money in the market and share the returns with you. Such types of plans are long term plans which cover life. You are bound to pay the premium until its maturity and the premiums payable for such plans are obviously expensive than other term plans. Since it is an endowment plan, in case you survive the tenure of the policy, an amount equivalent to the sum insured plus the accumulated bonuses is payable to you. If you expire during the tenure of the policy, the sum insured plus the accumulated bonuses is payable to the nominee or beneficiary. Special feature of the plan is that even on survival the policy holder is payable by the insurance company. This means that the plan is beneficial in both ways which is not the case in any other term policies.
