The main work of the policy is to cover the policyholder for a specific period of time after which he is awarded with all the money assured by the policy along with the entire bonus that is accumulated during the term of your particular policy.
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The sole reason behind the immense popularity of the policy is its quality of paying back the endowments assured within the terms and the condition to the policyholder.
It’s a universal fact that the responsibility of the policyholder to support the family financially reduces as soon as the kids are grown up settled independently. Hence from there the focus of the policyholder shifts towards him/her and his/her spouse in their retirement period. This is the time when the policy comes to action as the endowment – the original lump sum and bonus assigned comes under the hand of the policyholder. Now it depends solely on the member’s decision to either put it in any suitable investment or use it to buy an annuity policy for the rest of their life to generate monthly pension. This is one of the main highlights of the policy which get it into attention.
What is Endowment policy?
An endowment policy is basically designed to pay out the lump sum to the policyholder after the completion of the term of policy or after the demise of the policyholder due to any circumstance. Under the terms and condition of the policy the typical maturities sanctioned are ten, fifteen, twenty years up to a certain age limit as mentioned in the policy. Endowment policies also pay out under critical illness case.
The flexibility of the policy lies in the fact that it is in the hand of the policyholder to surrender at any time he/she likes and the amount or the endowment till that time is paid back to him/her as assured in the policy period under its terms and conditions.
Benefits of Endowment Policies
The premium rates of the endowment policies are far higher than the bonus rates as compared to whole life policies.
The cost of a whole life policy is comparatively lower than an endowment policy. The plus point of this policy is that the endowment paid to the policyholder under the policy term is actually all the premiums paid during his/her lifetime which is returned after the end of the policy term or due to any circumstance the demise of the policyholder.
If due to any circumstance the demise of the policyholder takes place then the policy pays back the assured amount to the family or the beneficiaries of the policyholder before the end of the policy term other its vice-versa.
Drawbacks of Endowment Policies
You may suffer a shortfall which has to be paid to the mortgage lender immediately on the policy’s maturity if the growth doesn’t match with your growth assumption.
The fund performance and size solely depends upon the insurance company you have invested.
The main problem lies in the fact that the terms and conditions written on the policy are not followed easily at all. It’s a very difficult task to cash in a policy because the insurance company can charge you high and you will be paid less than what’s assured.
How can we save you up to 40%
If you don't find the best value endowment insurance policy, over the lifetime of the policy this will cost you £1000's. Unlike other comparison sites we search over 400 endowment policies so you can quickly find the best possible cover at the lowest price.