3 Reasons to Get an Endowment Plan

| 19 Nov 2018

We understand that endowment plans are important. Our new marketplace feature allows users to purchase endowment plans that a policyholder wishes to sell.

Endowment plans are slightly complicated, arguably even more so than life plans. Before buying one, it’s best to understand what endowment plans are. That includes how they differ from whole/term life insurance, as well as the ideal types of individuals who can get the most benefits from an endowment plan.

For some, endowment plans are a tool for investment. For others, it is a form of insurance. With so many different interpretations, it’s easy to get confused about what an endowment plan really is.

 

At its core, an endowment plan is a life insurance plan that comes with a savings component and a lump sum of maturity benefit.

In other words, an endowment plan will grow in value over a certain period of your choosing. A lump sum will then be paid out on a specified date at the end of the period, also known as the maturity date.

Endowment plans differ from whole-life and term-life plans, even though they both offer life insurance coverage. The primary purpose of an endowment plan is to build cash value, which is a good way to set aside money for long-term goals, such as a child’s college education. That being said, a typical example of someone getting an endowment plan would be young parents thinking about saving up to pay for their child’s college education down the road!

With a better understanding of what an endowment plan entails, do you actually need one?

 

Insurance Coverage

 

Unlike typical investment instruments, endowment plans offer insurance coverage on top of any investment opportunities. In other words, they are a “two-in-one package”.

Even if the unthinkable were to happen before policy maturity, you or your children will still be protected in the form of a payout. The death benefit would also remain the same.

 

Financial Security of Loved Ones

 

Pay all the committed premiums and hold on to the policy until maturity. Parents who wish to save up for their child will receive guaranteed returns, regardless of what happens in the future.

This is one of the reasons endowment plans are so popular among parents whose goal is to save and invest for their child’s education in the future.

 

Lowering the Risk of Your Portfolio

Policyholders do not have to worry about the ups and downs of interest rates or the stock market. Compared to investing in the stock market, this is a very passive and low-risk source of investment and future income.

Even if you could profit more through personal investments, there is no guarantee you will be able to earn additional returns. In fact, you may even lose your entire principal!

Every individual will eventually need to have some risk-free assured investments as part of their portfolio. In order to balance out the risks, why not consider endowment plans?

 

Our New PPS Marketplace

If you would like to receive the perks of an endowment plan, get a quote from PolicyPal website where you can decide on the best policy most suited to your needs and compare quotes between the insurance providers we work with.

Alternatively, we launched PolicyPal Marketplace exclusive for sellers with the intent to discontinue their endowment plans. That means you can now legally buy and transfer ownership of someone else’s endowment plan. The main catch of purchasing an existing endowment plan: the endowment plan is closer to maturation, which indicates that there is a quicker payout period in contrast to brand new endowment plans that will require about 5 to even 20 years till maturation.

The buying process of endowment plans on our marketplace is straightforward. Stay tuned to our upcoming article when the marketplace officially launches. You may wish to indicate your interests or send forth your queries through WhatsApp at +65 8750 0688 or through email at [email protected].

 

Have any burning questions about insurance or looking for some useful insurance tips? Learn, ask and share with PolicyPal Insurance Community today!


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