The
Endowment Maze
An
endowment policy is a combination of insurance and investment, where a portion
is allocated towards mortality cover and the rest gets invested. You pay a
regular premium (frequency could vary—monthly, quarterly, half-yearly or
annually) and in return get a life insurance cover (the sum assured, payable at
death) along with other maturity benefits—regular annual bonuses called as
'reversionary bonuses' that accrues on this policy Insurance Planning Services in India.
An important point to remember here is that the 'bonus', usually declared annually,
does not compound, it only accumulates. Meaning, the return declared at the end
of the year is not re-invested and therefore stagnant.
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