Have you heard about the endowment plan before? Well, you’d probably want to explore your options for investment. Lucky you, this article focuses on the various perks that come with an endowment plan. See, the most secure and safest way to protect all your dependents against financial exigencies that may come up following your unanticipated demise is buying a term life insurance. However, what exactly is an endowment policy?
What is An Endowment Plan?
An endowment policy, which has various investment plans, is purposely meant to pay a lump sum after a particular period on death. But if the term comes to an end while you are still good in health, the cash can be utilized to do whatever you like. Be it taking kids to school, buying your dream house, buying a piece of land for farming activities, or even using it for other investment purposes. However, this could be a bit different from other forms of investment.
It is such a promising saving structure that would one day enable you to reap big with minimal regular contributions. However, if you intend to invest in an endowment policy, you would want to beware of the perks that this plan brings forth. Here are the key plusses associated with this plan.
- Safe Investment Option
Many investment plans are typically linked to fluctuating interest rates or market. However, this is not the case with an endowment policy. An aspect that makes it a safe investment option for most lawyers, business people, and every salaried individual.
You see, the good thing is that an endowment investment plan capitalizes on providing an umbrella to you and your loved ones against hard-hitting waves that strike during tough times. Thus, this is one of the best plans any young professional would want to consider for their future plans. You could even have it buy your home in the future or have your retirement cushioned effortlessly.
- Tax Benefits
Deductions and exemptions are the top income tax perks that one can leverage in an endowment investment plan. Little-known to many, it is possible to deduct from your taxable income a particular number of bucks. This is as per the income tax Act and applies to your insurance payments from your gross earnings. Also, death benefits are tax-exempt.
- Goal-Oriented Reserves
Many professionals often have future investment targets on their bucket list. Maybe, one would want to buy a house, a boat, a piece of land, taking children for higher education, or using the cash for retirement. In order to achieve such financial goals, the best investment plan would be taking up an endowment policy.
The policy requires that you give regular premiums at certain intervals, stipulated by the kind of plan you choose. Eventually, you get to receive the lump sum of cash when you probably need it most. Thus, it is such a great saving habit with great returns for anyone who wishes to retire happily or achieve their goals at a certain time in the future.
As you have seen, an endowment plan is the best policy that can help you live financially stable when you retire, take your kids to higher learning institutions without financial stress, or buy a home that you have coveted for a long time. Thus, you should consider investing in this plan.