123ArticleOnline Logo
Welcome to 123ArticleOnline.com!
ALL >> Insurance >> View Article

How Does An Endowment Plan Differ From A Term Plan?

By Author: Edelweiss
Total Articles: 8

Both term insurance plans and endowment policies are popular insurance products and are availed by many people looking for insurance plans. This article presents the critical details of these insurance plans and how they differ from each other.

What is a term plan?

A term insurance plan is merely a life protection plan, meaning that it provides the insured person with a life cover if the insured person meets with an unfortunate death during the policy term (the period in which the policy is active). The beneficiaries, in this case, will receive the sum assured/death benefits.

Why purchase a term plan?

The sudden demise of an earning member of a family not only creates an emotional impact but also causes a financial effect, which may be quite severe, to the remaining family members. This situation is made worse if the suddenly departed earning member was the sole breadwinner of the family since his/her dependents will have to face the financial burdens without a steady income, such as household expenses, repayment of loans, credit card EMIs, utility bills, and kid’s education fees.

However, if the breadwinner had purchased a term plan, the nominee would have received from the insurance company the sum assured, which can provide monetary support to the remaining family members. Since a term plan offers protection only till the policy term, if the policy term expires and the policyholder is still alive, no benefit will be vailed from the term policy. Hence, it is recommended that people opt for a more extended life cover, for instance up to the age of 80, so that they can live a stress-free life and death.

What is endowment insurance?

An endowment insurance plan or savings plan fulfills needs related to savings and protection. In a savings plan or endowment plan, the insured person receives both maturity and death benefits; this means that the person gets a sum assured on maturity and the nominee of the insured person also receives a death benefit in case the insured person dies suddenly during the policy term. There are different types of endowment policies, and it is best that one chooses the best endowment policy after looking at the various options available in the market. However, it should be noted that the death benefit offered in a savings plan or endowment life insurance is lesser than that what would be provided by a pure term plan.

However, when choosing between the various type of endowment policies and a term insurance plans, it is best to evaluate the offering and benefits of the product, along with one’s financial capacity and needs, to make an informed choice.

Total Views: 99Word Count: 440See All articles From Author

Insurance Articles

1. How To Choose The Best Dental Insurance?
Author: romyfernandis12

2. The Better Dental Insurance Plans Must Be Found
Author: romyfernandis12

3. Make The Humanao Ppo Dentist Search Online
Author: romyfernandis12

4. How Should You Select A Dental Insurance Plan
Author: romyfernandis12

5. Absolute Way To Get Rid Of Dental Problems
Author: romyfernandis12

6. Guardian Dental Insurance Affordable Solutions For Dental Coverage
Author: romyfernandis12

7. Understanding The Dental Insurance Plan’s Coverage Is Important
Author: romyfernandis12

8. Know About The United Concordia Dental Ppo Insurance Advantages
Author: romyfernandis12

9. A Complete Guide To Choose The Perfect Dental Insurance Plan
Author: romyfernandis12

10. What Kind Of Plan Is Offered By Uhc Choice Plus – Ppo Or Hmo?
Author: romyfernandis12

11. The Real Benefits Of United Concordia Ppo Dental Providers
Author: romyfernandis12

12. Get Complete Relief From Tooth Problems
Author: romyfernandis12

13. Ppo Vs. Hmo – Which Dental Insurance Is Better
Author: romyfernandis12

14. The Inside Details About Delta Premier Dental Insurance
Author: romyfernandis12

15. Grab Attractive Dental Plans At Careington
Author: romyfernandis12

Login To Account
Login Email:
Forgot Password?
New User?
Sign Up Newsletter
Email Address: