Calculate Returns on Endowment Plans: Know Bonuses & Plans

In India, endowment life insurance policies are known for being a smart investment option. These plans give you the benefit of both risk coverage in the form of life insurance and wealth accumulation from investments. Hence, they are a great option for people who want to protect their future and also have a chance at growing their money. 

In this article, we will explore the advantages, how to calculate the costs, and the different plans available for endowment life insurance policies. 

What Are Endowment Plans?

Endowment plans are a way to save money and have insurance at the same time. You pay a little bit of money regularly for a certain number of years. At the end of this period, if you survive, you get a big amount of money called sum assured. This money can be used for important things like financing your child’s education, their wedding, or even buying your own home. 

If the policyholder passes away unexpectedly during the policy term, their family or nominee gets a set amount of money. If the policyholder lives until the plan ends, they get that set amount of money, also called sum assured, plus some extra money called a bonus.  Hence, it is a good idea to know how much money you might get back from these plans.

What Is An Endowment Calculator?

An endowment calculator is a tool that helps you pick the right insurance and plan your investments better. It encourages you to save regularly for future long-term and family goals like having children or getting married. With the cost of living rising, just saving money regularly is not enough to make your money grow.

An endowment calculator shows you how much money you can accumulate over time by considering your initial investments, expected interest rates, additional investments, and how often you make these investments. By investing for the long term, you can build your wealth and enjoy a worry-free life. It calculates your earnings by considering the sum assured, any bonuses, and the total amount you have paid in premium.

Calculating Endowment Returns Using An Endowment Calculator

The Endowment Returns Calculator helps you understand how much money you can make each year. It uses the concepts of compound interest and inflation. You just need to input your initial investment amount, the interest rate you are expecting, how much you plan to invest over time, and how often you will make these additional investments. With this information, the calculator will predict your long-term earnings from these investments. It calculates your returns by considering the guaranteed amount, any extra bonuses, and the total amount you have paid.

Types of Bonuses in Endowment Plan

With your endowment plan, you can get bonuses like:

• Annual Bonuses: Also called Reversionary Bonuses, these depend on the insurance company’s financial performance. If the company performs well and makes profits in a financial year, they share a bit of profit with you in the form of a bonus.
  
  
• Terminal Bonus: This is a special extra payment that you may get depending on how well the insurance company does financially and its investment earnings. If the person holding the policy dies while the policy is active, this extra money is given to the beneficiaries of the policy. But whether or not this happens depends on what the policy term dictates.
  
  
• Interim Bonus: This bonus is given if the policy reaches its maturity date or if the policyholder passes away during the term of the policy, and a bonus has been declared in this timeframe. The amount of the bonus is calculated based on how many days are left in the policy term from when the bonus is announced.

Features of Endowment Policy

1. Dual Benefits: Endowment gives you both financial growth and life insurance. If something terrible happens to you, life insurance will protect your family financially. Along with life insurance, you will get a lump sum payment when the policy ends, which can help your savings and give you extra money. It is a smart and cheap way to save money for the future and protect your family from the problems that life may bring.
   
   
2. Financial Goals: An endowment plan can help you save money and build your wealth over time. Putting money into an endowment plan on a regular basis can help your finances, letting you save for big purchases or even vacations.
   
   
3. Independence: You can pick a plan that best fits your budget and way of life.  Endowment plans give you a lot of options when it comes to the length of the plan and the amount of the premium.
   
   
4. Relief from Taxes: Endowment plans also offer tax advantages.  According to Income Tax laws that are changed from time to time, the premiums paid for the policy may be able to be deducted from your taxes. Under Section 80C of the Indian Income Tax Act, you can get a reward amount. The total amount of tax that can be avoided is limited to 1,50,000 INR.
   
   
5. Loans: Endowment policies also give you the option to take a loan on your policy. In case of any financial emergency, you can opt for a loan up to a certain limit. These loans are covered by the terms and conditions of the product. 

Things to Know Before Buying An Endowment Plan

When selecting the ideal endowment policy, it is important to take every step carefully. Here are some key points to guide your decision-making process:

1. Identify your goals: Take the time to figure out what you really need and pick the plan that fits your goals. If you are looking to grow your savings by investing, an endowment plan might be a great option.

• Terms and conditions: Make sure you really understand your policy to get the most out of it and avoid any unexpected issues. It is important to look closely at payment options, the duration, the policy term and its flexibility, options for loans and withdrawals, as well as the sum assured and potential returns.

• Pick what is right for you: While endowment plans offer several attractive benefits, it is essential to concentrate on what truly meets your and your family's needs. Providers like InsuranceDekho have a list of options available where you can compare plans and choose a plan that provides the most advantage to you and your family.

A List of Popular Endowment Plans

Here are some of the endowment plans that you can consider buying:

Bharti AXA Life Elite Advantage Plan

A well-liked option that Bharti AXA offers is the Bharti AXA Life Elite Advantage Plan. With this plan, you have the option to choose the term of policy, such as 5 years, 7 years, or 12 years, depending upon your requirements. The minimum entry age also varies based on the policy term, such as for a 10-year policy term- the age is 8 years, and for a 12-year policy term- it is 6 years. Plus, the payment options are flexible. You can pay on an annual, semi-annual, quarterly, or even on a monthly basis.

AEGON Life Premium Endowment Policy

The AEGON Life Premium Endowment Policy offers both maturity and death benefits without needing a pre-medical check-up to purchase it. The plan provides a guaranteed death benefit of 105% of the premiums paid. It has a policy duration of 10 years, and anyone with a minimum age of 18 years or older is eligible to start the policy. 

Bajaj Allianz Save Assure

The Bajaj Allianz Save Assure is another good choice for an endowment policy. It is a non-participating individual limited premium endowment savings plan. This plan offers a fixed premium endowment savings option, making sure that the policyholder receives both maturity and death benefits. When the policy matures, you will get 115% of the assured amount. You have the option to select a policy duration of either 15 or 17 years. You can also increase the benefits of this policy by adding a number of rider options. 

Future Generali Assure Plus

The Future Generali Assure Plus is a sought after endowment plan that is offered by Future Generali. It is a participating, non-linked endowment plan that has a minimum entry age of 3 years and up to 55 years old. It offers benefits upon both the maturity of the plan and in case of the policyholder's death, functioning as a traditional endowment plan with limited premium payments. You can also enjoy tax benefits with the Future Generali Assure Plus plan under the Income Tax Act of 1961.

Kotak Premium Endowment Policy

Another great option for an endowment plan is the Kotak Premium Endowment Policy. It is a combined savings and protection plan suitable for anyone between 18 and 60 years old. This plan allows you to receive benefits until you are 70, or we can say the maturity age is 70 years old. You also have flexibility in payment options to pay your premiums. You can pay them annually, semi-annually, quarterly, or monthly, making it convenient to fit into various budgeting schedules.

Conclusion

The endowment calculator can be used to find out how much money endowment plans give you. And we clearly saw that endowment life insurance has some great benefits. 

First, when the endowment insurance plan ends, you will have a savings account. And then, you can invest the money or use it to fund a comfortable retirement. Hence, endowment insurance provides a reliable amount of money as long as you keep paying the premiums, hence making it a safe and smart choice. So, start investing now, risk-free!