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There are different types of endowment life insurance policies that serve different purposes. Read on to know more about pure endowment plans.A pure endowment plan is a type of life insurance policy wherein the insurance company agrees to pay the sum assured to the policyholder if they survive the polity term. The amount is paid on maturity of the policy in a single instalment as a lump sum. This implies that with a pure endowment policy , you can be assured of getting returns.To get the payout, you must continue to pay the premium consistently throughout the policy tenure and survive through the specific duration as mentioned in the policy document. Another significant feature of this policy is that it does not pay the death benefit. This means in the event of the policyholder’s untimely demise before the end of the policy term, the family members will not receive any compensation.So, is pure endowment policy worth buying?Many insurance experts recommend buying an endowment policy along with a regular term insurance policy or any other life insurance plan that offers a death benefit. While the other policy may help you protect your family’s financial future, the pure endowment policy can help you save a small amount periodically for your future financial goals.Also, these plans help you to be disciplined with your savings. The amount you receive at the end of the policy tenure can be used for various purposes like paying for the child’s education or marriage or even prepaying the home loan .Pure endowment life insurance policy can be an ideal investment if you are looking for a goal-based savings plan. It is also useful to build a corpus for future financial needs.
Final Word
A pure endowment policy is a risk-averse insurance plan. But, a pure endowment plan alone may not suffice your insurance needs; you must buy a standard policy to take care of your family’s future even in your absence.
DISCLAIMER
The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.
