ENDOWMENT ASSURANCE POLICY
This policy not only makes provisions for
the family of the Life Assured in event of his early death but also assures a lump
sum at a desired age. The lump sum can be reinvested to provide an annuity
during the remainder of his life or in any other way considered suitable at
that time.
Premiums are usually payable for the selected term of years or until death if
it occurs during the term period.
The Endowment Assurance Policy-Limited Payment
Just as in the case of limited payment whole
life polices, here, too, the payment of premium can be limited either to a
single payment or to a term shorter than the policy. The endowment is, however,
payable only at the end of the policy term, or on death of the policy holder if
it takes place earlier.
If payment of the premiums ceases after at least three years' premiums have
been paid, a free paid-up Policy for an amount bearing the same proportion to
the sum assured as the number of premiums actually paid bears to the number
stipulated for in the policy, will be automatically secured provided the
reduced sum assured, exclusive of any attached bonus, is not less than Rs.250.
Such reduced paid-up Policy will not be entitled to participate in the profits
declared thereafter, but such Bonus as has already been declared on the Policy
will remain attached hereto.
Suitable For:
Being an endowment assurance policy, this plan is apt
for people of of all ages and social groups who wish
to protect their families from a financial setback that may occur owing to
their demise.
The amount assured if not paid by reason of his death earlier will payable at
the end of the endowment term where it can be invested in an annuity provision
for the rest of the policyholder's life or in any other way he may think most
suitable at that time.
Disability Benefit:
In case policy holder becomes totally and permanently
disabled due to an accident before reaching the age of 70 and the policy is in
full force, he will not be required to pay further premiums, (the Disability
Benefit is available in respect of the first Rs.20,000 sum assured on any one
life) and the policy will continue to be in force.
Accident Benefit:
By paying a small extra premium of Rs.1 per Rs.1000/- sum
assured per year he or his family are entitled to the following benefits on
death or permanent disability caused by accident. Even students above the age
of 18 years can avail of this benefit.
Premium Stoppage:
If payment of premiums ceases after at least THREE years'
premiums have been paid , a free paid-up policy for a reduced sum assured will
be automatically secured provided the reduced sum assured, exclusive of any
attached bonus, is not less than Rs. 250/-. The
reduced sum assured will become payable on the event as stipulated in the
policy.
Bonus:
Is there anything extra payable besides the sum assured
at the time of claim settlement? Yes, but only if it is a ‘with profits’
policy. Every year the Life Insurance Corporation distributes its surplus among
policyholder to ‘with profits’ polices in the form of bonuses. Substantial
bonuses have been declared in the past after each valuation of policy
liabilities.
This is the most popular form of life
assurance since it not only makes provision for the family of the Life Assured
in the event of his early death, but also assures a lump sum at any desired
age. The amount assured, if not paid by reason of his earlier death, becomes
payable at the end of the endowment term when it may be invested to provide an
annuity during the remainder of his life or in any other way he may think most
suitable at the time.