If you’re experiencing a major issue in saving money for a rainy day or are frequently purchasing items on a whim, an endowment plan may be for you.
An endowment plan is a life insurance policy that serves as a saving scheme that pays out a lump sum at the time of maturity or upon death. It’s an investment combined with an insurance plan that covers the life of the insured individual while helping the policyholder save over the term of the policy. Endowment plans can also be cashed before the fixed date of the policy, and the policyholder will obtain an amount decided by the insurance agency. This amount can come as a lifesaver for those who have just started their golden years or for important payments like purchasing a property, children’s schooling fees, paying for a wedding, etc.
Endowment plans types
There are different endowment categories to choose from. You can find the items in each category below by visiting a provider’s endowment plan Singapore offers.
- Wealth Accumulation Plans
- Retirement Plans
- Income Stream Plans
Choosing the right endowment plan requires ample research to ensure you’re making the correct choice. Below are a couple of considerations when picking out an endowment plan:
Features and benefits
A big feature of an endowment plan is its aim to save and plan for the future. A lump sum of money is given to the policyholder or nominee on the policy’s maturity. This lump sum can be used for various situations like buying a new house, clearing a debt, purchasing a new vehicle, marriage, etc. Another great benefit of an endowment plan is that you can avail a loan against it.
Right circumstances for availing
You should consider an endowment plan according to your financial status and needs. As you choose the right endowment plan, the three main areas to cover should be for protecting and ensuring financial stability, building savings for investment goals, and surpassing investment goals. Making an endowment plan a priority is worthwhile when you have a steady income, ensuring you will not miss out on monthly payments and incur penalties.
Endowment plans are perfect for saving money for your needs. People who spend money indiscriminately usually lack the discipline to save their income. Endowment plans ensure you can be disciplined into saving, leading to a large plan payout.
Choosing an endowment plan
There are multiple types of plans in the market, and it can be confusing which one to choose along with the right provider.
When picking out an endowment plan, Singapore’s top financial institutions offer to compare the premiums of different endowment plans and providers. Doing due diligence as you search will help make it easier to find the right endowment plan. Check the track record of the provider as well, including its popularity and reviews. Other crucial factors to consider are the agency’s financial stability, customer service, and claim settlement ratio.
Consider going for a provider that offers a simple and “easy to understand” endowment plan. Some endowment plans marketed even by reputed companies come with long and confusing terms, so work with them thoroughly during the consultation phase. Compare and select the most appropriate plan that meets your unique preferences.
