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Endowment insurance

Taking out an insurance policy can be quite confusing. You have to decide whether you want a term life insurance policy or endowment life insurance policy. So what is an endowment life insurance? It could be equated to a saving scheme which includes life insurance.
You or the insurer would specify a time period for the insurance policy, usually a minimum of ten years. During this time if you were to die or become terminally ill the policy would pay you like life insurance would. If you outlive the policy then you will get a maturity value or lump sum.
The money what you pay as premium would be invested by the insurer and returns if any would be added to your fund. If the money earns good rewards that the sum assured or maturity value of the policy will also go up.

Endowment Insurance is a life insurance contract that would pay an assured sum on the maturity of the policy or on death of the insured person, whichever is earlier. Typical Endowment insurance policies have ten, fifteen or twenty year’s maturity based on the age of the insured. A nominee or nominees must be specified as the payout on death of the insured is paid to the person or persons so nominated.

Endowment insurance policy can be surrendered before its maturity date and it is not advisable to do so unless there are very pressing reasons. The surrender value of the policy will be determined by the insurance provider based on the number of years the policy was active and the total premiums the holder has paid towards it. There are various types of Endowment policies.

Family income benefit

In this type, the family of the insured gets regular payments from the insurance provider, on the death of the insured, as per the period agreed to at the start of the policy.

Additional benefits

Additional benefits like critical illness cover, premium waiver, may be added on to the policy on payment of extra premiums. You need to choose these.
Payment for critical illness would need to be diagnosed and certified by the panel recommended by the insurance company.
The following are some of the diseases generally covered under critical illness:
Alzheimer’s Disease Angioplasty
Aorta Graft surgery Benign Brain Tumour
Blindness Cancer
Coma Coronary Artery By-Pass
Deafness Heart Attack
Heart Valve Replacement HIV/AIDS (under certain circumstances)
Kidney Failure Loss Of Limbs
Loss of Speech Major Organ Transplant
Motor Neuron Disease Multiple Sclerosis
Paralysis/Paraplegia Parkinson`s Disease
Stroke Third Degree Burns
Permanent Total Disability

Waiver of premium benefit, when included at extra cost, will kick into effect should be unable to pay your premiums in case you become disabled to work due to ill health.