Make Your Endowment Life Insurance Policy Work For You
Endowment Life Insurance Policy
There are many choices when it comes to taking out life insurance; one option you may want to investigate is endowment life insurance. This type of plan is slightly special in what it offers. Whereas normal life insurance plans only offer death benefit, this Endowment Life Insurance Policy will pay money out whether you pass away or not.
An endowment life insurance policy bears comparison to a term life insurance plan. Both of these policy kinds are active for a certain period of time, normally between 10 and 30 years. Whereas a term insurance plan only pays out should you die during that period, an Endowment Life Insurance Policy will pay out whether you live or die. Once the policy is due to end, the insurer will pay out a lump sum for you to use if you are still living. No further payments are received from a term insurance policy after the death benefit has been paid.
Another advantage of an Endowment Life Insurance Policy is that you can decide to cash it in before the policy expires. This commonly means that you will receive less money than you would have done if you let it mature, but you can receive the money back at a time that you most need to use it. For instance, if you cash in a policy after 15 years and it is due to run for another five, then you are likely to receive approximately half of the total that would have been paid out at the end of the policy. The exact amount of money you receive if you cash in will depend on the arrangements you have made with the insurer.
Endowment Life Insurance Policy
The major drawback of a Endowment Life Insurance Policy is that you are likely to have to pay a high premium than you would with any other kind. It is possible to get around this by getting a low cost endowment policy. This does mean lower premiums; however, the amount that will be paid out will decrease over time.
Alternatively, you could choose to get a return of premium life insurance policy. This is a fairly new insurance product but is designed to give you the best of both worlds. It is set for a specific period of time like other insurance products and you pay a set amount each month. If you die within the period, your beneficiary will receive the death benefit.
The main difference with this policy type is that you will also receive your premiums back in full if you are still living one the policy ends. The premiums are free of income tax and so the amount you get paid will be the same amount as you paid in over the course of the plan. Return of premium policies can also be canceled early. This will result in you getting back a partial amount of what you paid in but not all of it. The main benefit of this policy is that you are covered if you do die and covered if you don’t.
In order to get lower premiums you need to be aware of a few conditions that affect how much you will pay. The first of these is your age; you are likely to pay a higher premium if you take out insurance in later life. This is why it makes sense to take a Endowment Life Insurance Policy out in your earlier years. The second point to remember is that smokers will pay more than non smokers, sometimes as much as 50% more.
Endowment Life Insurance Policy
You can find out all about return of premium insurance and endowment life insurance policies from your financial adviser or insurance agent. Take the time to look at the Endowment Life Insurance Policy closely and ask any questions that you have. If you feel you are ready to buy these policies, most providers have a quick and straightforward application form on their websites.
UncommonLifeInsurance.com is the Internet’s premier resource for high risk life insurance, with facts and articles on topics such as return of premium, and much more. Click the links above for more information on a Endowment Life Insurance Policy !
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