A traded endowment plan is a type of life insurance policy that not only covers the life of the insured person, but it allows the policyholder to be ensured of endowments on the policy’s maturity date.
Essentially long-term savings plan like these endowment plans provide simultaneous life coverage for the individual and can be obtained from reputable insurance companies. Unlike loans such as property bridging loans in which you need to own a property in order to obtain. Endowment plans can be traded from the original policyholder, allowing you to acquire the bonuses and investments made from the life fund. Some of these plans can go up to over 20 years, with the investor not having to worry about reimbursement.
You can use this set of money to cater to important financial requirements, such as children’s education, marriage, retirement life and more. As such, the ‘traded’ endowment policy is a safe and reliable form of investment with a guaranteed sum at the end of the policy term.
If you’re looking to understand more about the traded endowment plan and the benefits, feel free to read below.
Who Receives the Benefits?
Policyholders will be able to acquire the full amount by the end of their insurance term. As bonuses of endowments are added and accrued, they are added to the endowment plan, which is payable either upon death or after policy’s maturity date.
If the insured should pass before the maturity date, the insurance company will pay the full amount from the endowment policy to the beneficiary. This way, the traded endowment plan offers dual benefits, such as saving money for your future and covering your life.
Let’s have a look at some of the features of the traded endowment plan.
Low Risk
There is a low risk attached to traded endowment plans, and you could be saving yourself time. Investing in a 25-year endowment policy 3 years before its maturity date can be guaranteed savings return in the future. Unlike mutual funds or an equity term loan, the traded endowment plan is a secure and reliable form of investment. Not only do you skip the initial years of the endowment policy, you derive maximum benefits from such endowment policies as well.
Higher Returns
“Capital Guarantee” is a value in every traded endowment plan that is derived from the sum assured in addition to all bonuses. Unlike an easy cash loan that you could acquire from any other insurance company, an endowment plan offers much higher returns than your standard savings plan. It is a perfect opportunity for people looking to save money for a special occasion or after-retirement life as the assured money cannot be reduced or removed.
Flexible Option
You can choose the investment terms of each endowment plan according to your needs. With no health or age requirement required, picking a flexible option can aid you in making desired financial planning for your future. Whether you’re saving up for your children’s education, retirement plan or others, you can choose the investment term required for your financial needs.
Should You opt for a Traded Endowment Plan?
If you’re seeking to gain a foothold in your financial planning, a traded endowment plan can be potentially a good savings plan to save up for the future. This is because once the policy is officially transferred over to you, you will be the new policy owner of the endowment plan, including all bonuses that have been declared by the insurance company. You can feel safe in preparing for the future ahead.
