In an era of financial uncertainties, safeguarding our future has never been more crucial. Endowment life insurance policy is a powerful financial tool designed to provide not only life cover but also the assurance of guaranteed returns. The policy tenure of endowment policies typically ranges from 10 to 30 years or more.
This article will explore the 10-Year Endowment Policy, a strategic financial tool where financial stability meets flexibility to secure your future. Let’s delve into the features, advantages, and considerations of the 10-Year Endowment Policy, empowering you to make the right decisions for a prosperous tomorrow.
Table of Contents
What is an Endowment Policy?
An endowment life insurance policy is a financial product that combines life insurance with savings or investment features. It is a type of life insurance policy that provides coverage for a specified period. These are typically sold with a fixed term, such as 10, 15, or 20 years and more. During this time, the policyholder makes regular payments to the insurance company.
If the policyholder dies before the end of the policy term, their beneficiaries will receive the lump sum amount as a death benefit. However, if the policyholder survives the term of the policy, the insurance company pays out a predetermined sum assured plus any accumulated interest as a maturity benefit.
What is a 10-Year Endowment Policy and How Does it Work?
The 10-year endowment policy has a fixed term of 10 years. This means that the life insurance coverage and the savings or investment component of the policy will be in force for a period of 10 years.
In a 10-year endowment policy, policyholders pay regular premiums for the entire 10-year term based on the premium payment frequency (monthly, quarterly, half-yearly, and yearly) chosen by the policyholder. The premiums are typically fixed and do not change during the policy duration.
A portion of the premiums paid by the policyholder goes towards the investment component. This investment may grow over the policy term and is paid out as a lump sum along with the guaranteed sum assured at the end of the 10 years.
In the event of the policyholder’s death during the 10-year term, a death benefit is paid out to the beneficiaries. If the policyholder survives the entire 10-year term, the insurance company pays out the maturity benefit. This usually includes the guaranteed sum assured and any bonuses or returns generated by the investment component.
Example Case Scenario
Example Case Scenario on How 10-Year Endowment Policy Will Work:-
- Policyholder: Mr. Ramesh
- Sum Assured: Rs.10 Lakhs
- Policy Term: 10 Years
- Premium Payment Term: 10 Years
- Premium Payment Frequency: Annual
- Annual Premium Amount: Rs.50,000(Approx.)
Note: Premiums may vary based on the data entered by the policyholder. To get the exact premium rates, compare quotes at PolicyBachat.
Death Benefits:
In the unfortunate event of Ramesh’s demise during the policy term, the nominees or beneficiaries will receive the sum assured, i.e., Rs. 10 Lakhs
Maturity Benefits:
If Ramesh survives the entire 10-year term, he will receive the maturity benefit. The maturity benefit typically includes the sum assured plus any bonuses or returns generated by the investment component. Let’s assume that, at the end of 10 years, the maturity benefit is Rs. 10 Lakhs + 1.5 Lakhs (Bonuses).
Key Features of a 10-Year Endowment Policy
Here are the key features of an endowment policy:
- Financial Security: A 10-year endowment policy provides financial security by offering life coverage during the policy term. It provides a death benefit to the policyholder’s beneficiaries in case of the insured person’s death during the policy term.
- Savings or Investment Component: In addition to the life insurance component, 10-year endowment policies also have a savings or investment element. Part of the premium paid by the policyholder goes towards building up a cash value over the policy's term.
- Surrender Value: If the policyholder decides to surrender the policy before the maturity date, there may be a surrender value, which is the amount payable by the insurance company. The surrender value is often less than the total premiums paid.
- Fixed Premiums: Policyholders pay regular premiums for the entire term of the policy i.e., 10-years, and these premiums are usually fixed.
- Bonuses: Some endowment policies may offer bonuses, which can be regular additions to the sum assured or the maturity benefit. These bonuses are often linked to the performance of the insurance company’s investments.
- Flexibility: With a 10-year policy term, you have the benefit of a relatively shorter commitment compared to longer-term policies. Depending on the policy, there may be options for the policyholder to customize or add riders to the base policy to enhance coverage.
Benefits of a 10-Year Endowment Policy
- Maturity Benefit: If the policyholder survives the entire 10-year term, they receive the maturity benefit, which includes the sum assured and any bonuses or returns generated by the investment component.
- Death Benefit: In the event of the policyholder’s death during the policy term, the nominee receives the death benefit, which is the sum assured.
- Tax Benefits: Premiums paid and benefits received under the policy may qualify for tax benefits under the Income Tax Act of India.
- Guaranteed Returns: 10-year endowment policies offer guaranteed minimum returns. This ensures that even if the any investment fluctuations, the policyholder will receive predefined minimum returns in the event of maturity or death.
- Limited Policy Term: The policy has a fixed term of 10 years. This means that the insurance coverage and any associated savings or investment component are applicable for this duration.
Best 10-Year Endowment Plans in India
| S.no |
Plan Name |
Entry Age |
Maturity Age |
Policy Term |
|
| 1 |
AEGON i-Guarantee Max Savings Plan |
3 Months to 50 years |
18 to 70 years |
7 years to 20 years |
Buy Now |
| 2 |
Bajaj Guaranteed Income Goal |
6 years to 60 years |
18 years to 72 years |
5 years to 20 years |
Buy Now |
| 3 |
Canara HSBC OBC Guaranteed Savings Plan |
0 years to 60 years |
18 years to 75 years |
10 years to 20 years |
Buy Now |
| 4 |
Edelweiss Tokio Income Builder Plan |
18 years to 55 years |
18 years to 67 years |
6 years to 12 years |
Buy Now |
| 5 |
HDFC Sanchay Plus |
30 days to 65 years |
18 years to 85 years |
5 Years to 20 Years |
Buy Now |
| 6 |
ICICI Prudential Guaranteed Income For Tomorrow |
18-policy term to 60 years |
18 to 85 years |
5 years to 20 years |
Buy Now |
| 7 |
Kotak Guaranteed Savings Plan |
3 years to 60 years |
18 years to 75 years |
10 years to 20 years |
Buy Now |
| 8 |
Max Smart Wealth Plan |
91 days to 65 years |
18 to 85 years |
6 years to 20 years |
Buy Now |
| 9 |
TATA AIA Life Guaranteed Return Insurance Plan |
18 years to 65 years |
18 years to 85 years |
5 years to 40 years |
Buy Now |
| 10 |
TATA AIA Fortune Guarantee Plus Plan |
1 year to 60 years |
18 years to 77 years |
6 years to |
Buy Now |
How to Purchase a 10-Year Endowment Savings Plan Online
The most effective way to buy the best 10-year endowment plan in India online is through PolicyBachat because it offers several advantages making it a convenient and efficient choice for many individuals. Here, you can compare different types of investment plans from various insurers in one place. Below are the steps to compare and purchase the best policy term 10-year endowment insurance policy online:
- Visit the official website and Click on the Investment Plan tab.
- Fill in the requested details such as name, mobile number, and email address.
- Enter your age and city.
- Select the plan which you want to buy. Click on the Proceed button.
- Use the online premium calculator to compare the premium amounts.
- Compare benefits, features, returns, and additional riders or bonuses.
- After comparing the products, select a plan which suits your requirements.
- Then pay for your policy by using an online payment method.
Compare Investment Plans
Factors to Choose When Purchasing an Endowment Policy
When purchasing an endowment policy, several factors should be carefully considered to ensure that the policy aligns with your financial goals and needs.
- Policy Term
- Premium Payment Term
- Premium Affordability
- Coverage Amount
- Returns and Bonuses
- Tax Implications
- Policy Exclusions
- Additional Benefits
- Claim Settlement Ratio, etc.
Conclusion
A 10-year endowment policy is a financial product that combines life insurance coverage with a savings or investment component for a fixed term of 10 years. In deciding on the best 10-year endowment policy, individuals should carefully assess their financial goals, risk tolerance, and the specific terms and conditions of the policy. Comparing endowment policies from different insurers, and understanding the policy’s long-term implications are crucial steps in making an informed choice that aligns with one’s overall financial strategy.
Compare Quotes Now at PolicyBachat to get guaranteed returns and secure a financial future on a limited budget.