Friday, November 5, 2010

Endowment Life Insurance, A Saving Policy

Life insurances are mostly designed for long term, some of the policies can have refund but some are not, depends on which policy you purchase. For example term life insurance has no cash value, it is designed solely for life protection, upon the maturity the buyer receives no refund, and all the premiums paid will not get back. Whole life insurance has cash value, but it has no maturity, it is a life-long investment.

Some people want to have protection and have saving at the mean time; endowment life insurance is the ideal policy, because the buyer can have not only protection, the maturity of the policy is short, and he also benefits the interest and the full amount premium refund upon maturity.

An ideal plan for saving
The premium of this policy is high but the amount payable is within short term, the policy holder can cash out the money in 10 to 20 years time. This policy provides coverage to the buyer for a specified term and the sum assured is payable to the policyholder along with the entire bonus accumulated upon the maturity of the policy, it is suitable for those who want coverage and at the same time can have big saving.

Different types of Endowment Life Insurance
Endowment plan is categorized as full endowment, modified endowment, low cost endowment and traded endowment; it is advisable to find out which product is suitable for you.

Surrender of policy
In the event of surrendering the policy the buyer can cash in his money earlier, he will receive the surrender value, the payout is determined by the insurance company, and it depends on how much premium paid.

Premium rate
This policy covers the buyer death benefit and has an early maturity, therefore the premium is higher than whole life insurance and the bonus rates lower, and the buyer will receive his premium payments upon maturity. The maturity ranges from 10 years to 35 years, the shorter the period the higher the premium.


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