Endowment policies are the safest bet when you want to cover your entire family

and are a middle class salaried person. Endowment policies are the safest in the
sense that the sum assured and the benefits one gets from these polices are pure
ones. Various add – ons or riders make them more open. These are perfect in
condition where you wish to ensure your entire policy.

One of the best use of an endowment policy is repaying the mortgage once sum
assured is received at the end of the term of the policy.

Endowment Policies are often known as pure insurance polices for the fact they
come with sum assured which generally does not change along with the term of the
policy. These are unlike ULIPs where the sum assured, often comes which changing
amount of benefits. In an Endowment Policy, your family (or the surviving) gets the
sum insurance in event of your death. The sum assured is given either in one time
payment (lump sum) or in regular cheque payment – as mentioned in the policy.
`
In Endowment Policy you can also take add – on or rider. A addd rider in terms of
Insurance Industry is the additional cover which you can purchase at an additional
cost. These riders are linked with the policy and the amount of premium you pay
includes the rider fee.

One of the best covered rider is Critical Illness Rider which includes cover for critical
illness like cancer, heart attack, kidney failure, motor neuron disease, stroke, paralysis,
benign tumor, angioplasty, Parkinson’s disease, heart valve replacement, aorta graft
surgery, permanent total disability, major organ transplant multiple sclerosis and so on….

Protecting yourself and your family from the unseen and unpredicted is a good
thing. To realize the importance of insuring your family thereby safeguarding them
from the worst is a work of fast and realism. The sooner you realize this fact, the
better it would be.

Endowment plans are good for salaried people or for those who do not believe or
can’t afford taking risks. Several private and govt. life insurance providers are
offering life insurance policy. Best named like LIC, ICICI Prudential and Aegon Religare
often offer get good after sales services. Call on an insurance advisor and get your
family secured.

An endowment policy is a combination of both an investment and a life insurance policy that
gives the owner of the policy a payout of cash after a set amount of time. The payment of an
endowment life insurance policy is guaranteed if the insured person survives to the end of the set
amount of time or to payable to dependants upon the death of the insured. The set amount of
time is referred to as the endowment period.
Special Merits of Endowment Policies
 There are three special merits of an endowment policy. First, it is a policy that combines both
protection and investment. Second, it is a method of mandatory saving. Third, it is a way to
establish funds for special objectives that the owner of the policy has the ability to use. These
three special merits allow the owner to save for the future while giving her insurance coverage
and the possibility of attractive returns while the policy matures.
Who Uses Endowment Policies
 Over the last 15 years, endowment policies have not been used by many people. In the past,
endowment policies were popular at the majority of insurance companies as savings
mechanisms. Endowment policies were previously used by middle class or wealthy people who
would not have an immediate need to access or use the funds before the policies maturity date.
Currently, many people, no matter their financial position, no longer use endowment policies,
but instead use annuities or universal life policies.
The Benefits of an Endowment Policy
 These include attractive returns. When you save a modest amount month to month, you will
see your money increase gradually and often have better returns than bank deposits. There will
be a bonus upon maturity. Your insurance coverage will increase over the period of time as
bonuses are accumulated. The endowment policy offers flexibility as you can choose the
duration of the policy anywhere from 10 years to 30 years. Cash value is another benefit as most
endowment policies have a cash value after two years, allowing the policy owner to take a cash
loan of up to 95 percent of the policy's value.
Disadvantages of an Endowment Policy
 The disadvantages are that the payout is taxable. Also, if the market does better than you, you
are locked in and cannot take advantage of an upward swing that will allow you to make a
greater profit. And you will have to pay a penalty if you take out the money earned before the
agreed upon endowment period. The policy is not recommended for people who might need the
money sooner than the maturity date.
How an Endowment Policy Can Be Used
 An endowment policy can be used for planning college education expenses to saving money
for retirement. The endowment policy pays out a set amount, making it more reliable than other
investments that might fluctuate with the economy. The known amount helps the owner plan for
how and when the payout of the policy can be used.

1. ce »
2. Life Insurance »
3. How Does Term Life Insurance Work?
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How Does

How Does Term Life Insurance Work?

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By Amy Jorgensen
eHow Contributing Writer

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Getting a Term Life Policy

1. When you need affordable life-insurance coverage, term policies are likely to
be your primary option. You can get quotes for these policies by going
through an insurance agent or one of the online insurance brokers. Look at
the costs of the premiums, as well as the amount of the death benefit your
beneficiaries will receive. Although you may not have to undergo a full
physical to be approved by the insurance underwriter for the policy, you will
be asked questions about your medical history.

Basics of the Policy

2. Term life-insurance policies provide coverage only for a specified length of
time. That term can be anywhere from 1 to 20 years, depending on the policy
 you select. During the term, your beneficiaries will be entitled to receive the
specified death benefit if you pass away. For example, if you have a 10-year
policy for $100,000 and die during the ninth year, your beneficiaries will
receive the full $100,000. Failure to pay the premiums, of course, will cause
your policy to be canceled before the end of the term. Because the insurance
company is betting that you will not die during the term, the insurance
premiums are more affordable, because the risk to the company is lower.

Reaching the End of the Term

3. When the specified term of the policy ends, the policy expires; the
beneficiaries are entitled to receive nothing after that point. However, the
policy holder does have two options. First, he can usually renew the policy for
another term. The premiums are almost always going to be higher, because
as your age increases, so does the risk of your death during the term. In
some cases, term life policies cannot be renewed once you reach a certain
age. Policies usually do not guarantee renewal of term life policies. Second,
you can convert the policy into a permanent life-insurance policy. The
amount of coverage will be the same, but the premiums will be higher in
most cases. However, you will be able to keep your policy regardless of age
or health issues as long as you continue to pay the premiums. The term life
policy must be converted prior to its expiration.

Considering Other Options

4. While term life insurance is one option, you may want to consider other
choices before purchasing a policy. Whole life and universal life are the other
two widely available types of life insurance. Both are permanent policies.
With whole life, your policy will build cash value, which you can use as
collateral for a loan from the insurance company. Beneficiaries also receive a
guaranteed death benefit (loan amounts are deducted from the benefit,
however). Universal life is similar to whole life, but offers more flexibility. For
example, you can pay larger premiums to build up cash value more quickly,
or you can stop paying premiums once enough cash value has accumulated
to cover them. Discuss all of your options with a trusted life-insurance agent
before choosing a policy

Differences Between Whole Life Insurance and Term

Life Insurance
1. Whole life insurance is a way for individuals to protect their families after their death.
The individual decides on a coverage amount and agrees to pay monthly premiums to
the insurance company. Paying these premiums makes sure that the death benefit will be
paid and builds cash value in the policy. As the cash value increases, policyholders may
borrow against it. Depending on the performance of the investments, the insurance
company may elect to pay cash dividends to investors. Whole life insurance is a good
investment option for people who need life insurance indefinitely to protect their family
or company. Whole life can also be customized to add children or a spouse.
Advantages of Whole Life
2. Whole life insurance holders are guaranteed a fixed premium for the life of their policy.
While it may be initially more expensive than term life, whole life may be the more
economical option in the long run since the premium does not increase if you plan to
keep the policy for your entire life. As long as you keep up with your premiums, you are
guaranteed to have the death benefit paid. The cash value grows tax free, and the death
benefit is usually free from federal taxes.
Face Value and Cash Value
3. The face value of a whole life insurance policy is the amount of money that will be paid
to the beneficiaries when the holder dies as long as premiums are current. The cash value
of a policy increases over time as premiums are paid. The policyholder is able to borrow
money against the cash value of the policy. If the holder of the policy ceases to pay the
premiums for the policy, the holder will be paid the cash value but will not receive any
further benefit when he dies. The holder also has the option to take out the cash value
minus any premiums that are owed or outstanding loans on the cash value.
4. ntroduction
5.  Whole life insurance is different than term life insurance. It is a permanent life
insurance policy that can serve more than one purpose. It not only provides financial
protection for beneficiaries, it is a financial investment for the policy holder that can be
useful in times of financial emergencies.
6. What is a Whole Life Insurance Policy?
7.  Unlike term life insurance policies that end when a policy holder reaches a certain
age, whole life insurance policies last throughout the policy holder's life. As long as the
policy holder pays the insurance premiums, the policy holder will never find themselves
without a life insurance policy.
8. Payments on a Whole Life Insurance Policy
9.  A whole life insurance policy is taken out for a set amount of payout money. The
policy holder makes a set monthly payment that does not get lowered or raised. Unlike
term life insurance, the monthly payment in whole life insurance amount is fixed as long
as the policy is kept active. Rates do not get increased or cancelled if the policy holder
becomes ill.
10.Pay Out of the Whole Life Insurance Policy
11.  The policy holder has the choice to keep the policy active or fully cash out the policy
and keep the money. If the policy holder fully cashes out the policy, the policy is closed
and no longer exists. Whole life insurance policies earn interest. A policy holder can cash
in on the interest of a whole life policy. Policy holders can borrow money from their
whole life policy and pay it back later. If a policy holder cashes out on interest or borrows
money from the policy, the pay out benefits to beneficiaries will be reduced until the
policy holder repays the money.
12.Difference Between a Term Life and Whole Life
Insurance Policy
13.  With a term life insurance policy, only the beneficiaries can receive cash from the
policy. With a whole life insurance policy, the policy holder can cash in and get back part
or all of the money they put into the policy if they choose to do so.
14.When a Whole Life Policy Does Not Make Sense
15.  A whole life insurance policy is generally not recommended for an elderly person.
Because whole life policies are designed to be permanent policies that are paid into for a
length of time, the premiums for an elderly person would be high and most likely not
affordable.