Endowment Policy

The endowment policy can cover the risk for the specific period of time and at an end of that period the sum assure will be paid to a policyholder with bonus which is accumulated at the policy term. The endowment policy of the life insurance is primarily designed to offer the living profit and secondarily to offer the protection of the life insurance. So it is an investment rather than the complete life policy.

The endowment life insurance will pay the policy’s face value either at insured’s death or after many years of the premium payment. The endowment policy is the tool of collecting the capital for the particular reason and protects this saving program against premature death of the saver.

The premium on the endowment policy is to be paid for full period of an endowment policy until an insurer dies earlier. When it is compared to the whole life policy, bonus rates are lower and premium rates are higher for the endowment policy. But major attraction of the endowment policy is that it provides a return when policy comes to the end on the premium payments. The endowment obtained at the time of the maturity of policy may be used to buy the annuity plan to generate the monthly pension for whole life.

The endowment policy is the most famous insurance plan. Inspite of providing the financial risk cover if an insurer who is generally a family’s breadwinner premature death, an insurance amount is repaid also after the risk is over. Endowment amount to be paid at the time of maturity of policy may be making used for meeting the major expenditures like children’s education, children’s marriage, etc.

The unit linked endowment is the investment in which premium is to be invested in the units of the unitised insurance fund. The units are the encashed which can cover cost of life insurance. The policyholder can choose in which fund his premiums are to be invested and also in what proportion. The unit price is published on the regular basis. An encashment value of policy is present value of units.