3 Important Things To Consider While Buying An Endowment Plan

An endowment plan is a savings plan that comes with a savings component and life insurance. Typically, you contribute premiums towards the plan and get paid back a lump sum upon maturity. There is death benefit paid out if the policyholder passes away prematurely. An endowment plan is essentially a savings plan that helps you build a nest egg for the future. If you are taking an endowment plan for the first time, you might need a bit of help. To that effect, we have listed down 3 important things that you must consider while purchasing this insurance savings product.

1.      The reason or goal for taking the plan

Before purchasing your very first endowment plan, you need to figure out the reason for taking the plan. Are you buying the plan to save up for your child’s university fees a few years down the line? Or, perhaps, you want to build a corpus of funds for retirement. Either way, knowing your goal will help you decide two things –

·         How much you need to save up

·         What tenure is ideal for your endowment plan

Ideally, you would want the endowment plan to mature in time to financially support the reason you took it for. Doing a bit of groundwork will help ensure that you are on the right track from the beginning.

2.   Your preferred method of paying the premium

Insurers in Singapore offer you a choice between a single premium endowment plan and a regular premium endowment plan. You can take your pick based on your preference and needs. You may, perhaps, want to pay a single lump sum premium right now and complete your payment before any major responsibilities surface. Or, you may find regular premiums to be more affordable and in tune with your budget. Either way, do a careful estimation of your finances before deciding which premium payment term suits you better. Do not merely think of a year or two into the future; think of how you can afford the premiums throughout the tenure of the plan.


3.   Features & benefits offered by the insurance provider

You need to compare the features of the endowment plans offered by various insurers so that you can pick the one that has the best value. Look for a plan that has a wide range of policy term. Check whether the insurer offers capital guaranteed upon the plan’s maturity. An easy application process is a definite bonus; you might want to pick a plan that does not require you to undergo any medical checks before signing up. Finally, look for an insurance provider who offers riders to enhance your plan. You can consider to opt in for riders that will waive your endowment premiums if you are diagnosed with any of the insurer’s listed critical illnesses or medical conditions.

We hope that this article will help you choose a good endowment savings plan in Singapore. You can speak to a financial consultant for further assistance and advice in selecting a plan specific to your finances. All the best!



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