One should always prefer endowment plans rather than savings plans to remove the risks involved. In most savings plans, the investor has to contribute money in intervals to accumulate a required fund.
Even though these plans provide a nomination facility, the required funds remain incomplete if anything happens to the investor during the investment duration.
In such cases, endowment plans are the best savings plans.
They have capital protection of the investment, and if something happens to the policyholder, the nominee will get the assured sum even when the remaining premium payments are incomplete.
If you want to know more about purchasing such plans, the following guide will help you.
So, pay attention as you go through the five main stages of buying endowment plans.
The plan selection process is crucial for purchasing endowment plans as it decides which plan you buy.
It would be best to compare all endowment plans from all major insurers in the country.
Below are the steps to conduct a plan comparison to find the best savings plan.
- The first step of comparison will be to create a goal amount for your investment.
- Among the available plans, choose the ones that can provide the goal amount.
- Among the results, select plans with a guaranteed return.
- Among them, choose plans whose premiums are within your budget.
- Then choose the plans with a high-interest rate.
By following these steps, you will get a few best savings plans. See if you can further customize the endowment plans according to your requirements. And choose the one that fits right into your budget and needs.
The next step in buying endowment plans is the plan application process.
Here you have to qualify a few eligibility criteria to proceed with the application.
If you are not eligible, the insurer will reject your application. Given below are those eligibility criteria.
- The applicant must be an Indian national.
- They must be within the ages of 18 and 65 at plan commencement.
- They must clear a few medical tests.
- They should provide proof of income.
- They should provide their tobacco usage status.
They should possess essential documents such as proof of identity, age, income, bank account details, and the nominee’s documents.
The next stage after plan application approval is the payment.
Some insurers can also demand payment during the application process, and in case the insurers reject the policy, they will refund the money.
The payment will include your first premium and some administrative charges.
Nowadays, insurers provide several online payment modes other than conventional payment modes.
They will make your job easy while making the first and future payments.
After payment, the insurer will provide the policy document via mail. It is necessary that you keep it safe for future correspondence.
Plan management includes some steps you take after purchasing endowment plans.
These include paying premiums on time and adjusting the plan if the insurer allows it.
The best savings plans allow changing the features of the plan mid-term. The changes include:
- Changing the payment frequency.
- Increasing the assured amount.
- Adding riders and covers.
- Creating a joint plan with family members.
The final stage of an endowment will be when the nominee raises a claim or when the policy term ends.
In both these cases, the nominee and policyholder can choose different pay-out modes.
The available pay-out disbursement modes include monthly payment, one-time payment, and a combination of both.
It helps the dependents or yourself receive the final amount as per the current need.
With the help of this guide to purchase endowment plans, you can quickly get a good one for yourself.
And to further increase the reliability of endowment plans, you can choose a good plan provider.
Endowment plans are the preferred choice of several people who wish to create funds for the family and dependents.
So, invest in these plans to provide assured returns to your loved ones and gift them financial safety.
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