5 Checks When Buying Life Insurance Endowment Plan


In this video, we discuss 5 important things you need to keep in mind before buying life insurance endowment plans A lot of people end up buying life insurance endowment plans without knowing about their features When buying a life insurance endowment plan, check whether it provides adequate life insurance coverage You can find the life insurance amount you need with the help of online calculators You might just find out the premiums to be too high for the life insurance coverage you need Remember, you will need to pay the high premium during the long term of the life insurance endowment plan This is the reason why many experts recommend term plans since they provide life insurance coverage at affordable premiums Second, is the fact about charges for such plans Unlike ULIPs, you don't get to know about them You don't get to know the impact of the charges going out of your premium, on the investment outcome In an endowment plans, typically a lot of the premium goes initially for paying charges such as commissions for distributors selling the plan Third, life insurance endowment plans have very high surrender charges Just to get your premiums back in a life insurance endowment plan, you will need to wait 7-8 years, or more You can check the surrender amounts at the back of the policy document The penalty of making a wrong choice in life insurance endowment plan is very high Number four, the returns are not spectacular Since the insurance company is taking the investment risk, therefore, it is investing in lower risk investments that provide lower returns Effectively, the return is 4-5% and 6% at a stretch Fifth, the bonus, wherever applicable, is also not definite Typically, money in life insurance endowment plans don't grow faster than inflation in the long term The question then arises whether you should be part of such a plan

Source: Youtube


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