Life Insurance Q&A, Endowment Plans Basics, November 8, 2017


In this video, we are taking up queries by two of our viewers on life insurance endowment plans To understand life insurance endowment plans, we need to provide a brief primer on life insurance Life insurance covers your family in the event of an untimely demise When death occurs before the end of work life, the family loses out on the regular income and savings While income takes care of regular expenses, savings when invested, grows over time to address needs like children's higher education Term plan provides pure form of life insurance that covers the gap in financial resources in the case of an untimely demise Term plan provides protection during the term or period of coverage of the life insurance plan Numerous life insurance plans combine protection with life insurance One category of protection cum investment plans is where the life insurance company is taking the investment decisions This is what roughly an endowment plan is about These are lower risk, lower return plans The company can announce a bonus annually, during the course of the policy term and the end of term, and at other times There is also another variant where apart from the protection, you take the investment decision for your premiums This is for buying units of a fund These plans are called unit linked insurance plans or ULIPs There, you are choosing which fund's units you want The investment risk is taken upon by you Once you have figured this major difference out, the rest is easy to figure out Joint life endowment involves a married couple buying a joint life insurance endowment plan covering each other's lives In double endowment plan, you get double the life insurance coverage for accidental death by paying marginally higher premium

Source: Youtube


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AJ

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