Women are financially independent and decision-makers on personal and professional fronts. Whether taking care of themselves or achieving their goals on their own merit, a woman does it all. The goals have changed from raising a family to more financial goals. Whether be it buying her own house, saving money to study abroad, or travelling around the world, a woman is focused on working hard, and achieving her goals.
In order to turn these goals into reality, along with earning, it is also important that a woman invests and saves for the long haul. This is because simply having money in the bank will not yield returns and grow wealth. One financial product that most women must include in their financial portfolio is an endowment plan.
What is an endowment plan?
An endowment plan is a type of life insurance with a savings component attached to it. It offers the dual benefits of providing a life cover along with returns that generate wealth over the long haul. The way an endowment plan works is quite simple to understand. When you buy one, you are required to pay a fixed sum periodically to your insurance provider, known as a premium. After you do so, in return, you will receive the financial benefits when your endowment plan matures.
The investment aspect of the plan allows you to achieve your goal. One of the things to consider before buying an endowment plan is the funds you require after a few years. This ensures that when your plan matures, you have the money to achieve your goal. Also, since endowment plans are not linked to the market, they offer fixed returns. They are safe from any fluctuations that debt, equity, and hybrid investments usually have. Hence, with an endowment plan, a woman can easily achieve her long-term goals.
Why buy an endowment plan?
Before investing in any instrument for the long haul, there are several factors that you must consider. Each product has its own distinct feature, which makes it the perfect part of every individual’s portfolio. Here are some benefits of an endowment plan which will enable you to achieve your goals easily:
Offers life protection
The way an endowment plan is created, the component of life insurance is a natural part of it. This means that when you buy an endowment plan, before its maturity, for the entire duration, you get protection for your life. This means that in case of your sudden demise, your nominee will receive the death benefit, which is the amount of sum assured. The sum assured will be useful for your dependents to meet their financial needs in your absence.
Fixed returns
When you are investing or saving in an instrument, it can be a hassle to track the ones that offer volatile returns. Also, if during the maturity of the plan, the financial markets are not performing well, it may even lead to eroding the investment. When you buy an endowment plan, you earn fixed returns from the plan as mentioned on paper. Irrespective of the payout you opt for, the returns that you have earned on your savings are fixed. This ensures that when your endowment plan matures, you will receive a fixed amount.
Several tax benefits
One of the major things to consider before buying an endowment plan is its tax implication. When you buy an endowment plan, the premiums that you pay for it are eligible for deduction under Section 80C of the Income Tax Act. Also, when your plan matures, the maturity amount that you receive is also subject to exemptions.
Provides maturity benefits
When you buy an endowment plan, you get dual benefits. One being life cover and the other one being providing returns on maturity. The premium that you pay towards your plan provides fruitful returns in the long run. When your plan matures, you receive a payout as a maturity benefit. This includes your savings along with the returns you earned on it.
Add-on benefits
Several endowment plans also offer benefits like surrender benefits, additional riders for life insurance cover, and even flexibility in paying premiums. Depending upon your individual situation, you can benefit from these add-ons facility too.