5 Checks When Buying Life Insurance Endowment Plan
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Here are five things you must check before you buy life insurance endowment plans
Edited Highlights
0:05 In this video, we discuss 5 important things you need to keep in mind before buying life insurance endowment plans
1:05 A lot of people end up buying life insurance endowment plans without knowing about their features
1:37 When buying a life insurance endowment plan, check whether it provides adequate life insurance coverage
1:47 You can find the life insurance amount you need with the help of online calculators
2:13 You might just find out the premiums to be too high for the life insurance coverage you need
2:22 Remember, you will need to pay the high premium during the long term of the life insurance endowment plan
3:45 This is the reason why many experts recommend term plans since they provide life insurance coverage at affordable premiums
4:01 Second, is the fact about charges for such plans. Unlike ULIPs, you don't get to know about them
4:25 You don't get to know the impact of the charges going out of your premium, on the investment outcome
4:34 In an endowment plans, typically a lot of the premium goes initially for paying charges such as commissions for distributors selling the plan
4:54 Third, life insurance endowment plans have very high surrender charges
5:28 Just to get your premiums back in a life insurance endowment plan, you will need to wait 7-8 years, or more
5:43 You can check the surrender amounts at the back of the policy document
5:57 The penalty of making a wrong choice in life insurance endowment plan is very high
6:08 Number four, the returns are not spectacular
6:22 Since the insurance company is taking the investment risk, therefore, it is investing in lower risk investments that provide lower returns
6:43 Effectively, the return is 4-5% and 6% at a stretch
6:47 Fifth, the bonus, wherever applicable, is also not definite
7:20 Typically, money in life insurance endowment plans don't grow faster than inflation in the long term
7:38 The question then arises whether you should be part of such a plan
