Most people have in dilemma while deciding the insurance plan. It is bit confusing which one to choose. We need to know first what are these plans and what are their features.
We can understand these with below one line description-
Term plan = Pure insurance plan
Endowment plan = investment + insurance
Both have their advantages and disadvantage over one.
1) Premium and coverage: term plan have lesser premium than endowment plan and life cover amount is also too more than endowment plan. Endowment plan's premium cost more and it have lesser life coverage amount.
2) Maturity Benefit: The only benefit of endowment plan is that you get a certain guaranteed amount at the time of maturity that is why it is kind of investment. You will not get any maturity amount in case of term plan insurance but in case of unfortunate demise of insurgents, nominees will get a large amount cover.
Most people prefer term insurance plan over endowment plan. One can save and invest the remaining premium of endowment plan and earn more return.
We can understand these with below one line description-
Term plan = Pure insurance plan
Endowment plan = investment + insurance
Both have their advantages and disadvantage over one.
1) Premium and coverage: term plan have lesser premium than endowment plan and life cover amount is also too more than endowment plan. Endowment plan's premium cost more and it have lesser life coverage amount.
2) Maturity Benefit: The only benefit of endowment plan is that you get a certain guaranteed amount at the time of maturity that is why it is kind of investment. You will not get any maturity amount in case of term plan insurance but in case of unfortunate demise of insurgents, nominees will get a large amount cover.
Most people prefer term insurance plan over endowment plan. One can save and invest the remaining premium of endowment plan and earn more return.
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