Endowment Insurance policy; Best Insurance Policy to Secure Your kid’s Future Financial Risk.

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 Endowment Insurance policy 

Best Insurance Policy to Reduce Your kid’s Future Financial Risk: 




As parents, we are often in a disarray on how we can secure the future finances of our children. Many things come to mind getting them a property, for example, a land or a house, engage in a monthly saving with a financial institution in a bank. Of course, all of these are good plans, contrarily looking at the financial profitability and security of such investments compare to taking an annuity insurance policy for the child or children is the best option. “Smart parents over the years have been using these insurance policies to pay their child/children college fees and stay away from debts, equally they use these policies as a medium to prepare their child/children towards a first business lumpsum fund upon maturity of the policy.


What is an Endowment Insurance policy?


According to the Chartered Insurance Institute CII UK (2016), an endowment policy can be described as a savings or investment vehicle that includes an element of life cover. The policy is taken out for a fixed term. It pays out a lump sum at the end of this term, or on the life insured's death if that happens sooner. Endowments have historically been available on a with-profits or unit-linked basis. Premiums can be paid regularly or as a one-off single payment. Most policies have terms of 10, 15, 20, or 25 years. The last day of the policy's term is known as the maturity date. Therefore an endowment plan is a combination of insurance and, investment,  this is why the insured gets a lump sum along with bonuses in the case of policy maturity or on death event. 



Let’s look at the Types of Annuities that directly affect our Endowment plans.


A child’s School endowment and or Life insurance policy operate through an insurance annuity (a form of insurance or investment entitling the investor to a series of monthly, annual sums or lump-sum payment plan) policy. 

There are three types of annuities: Elaine et al. (2020),

-Fixed Preset/guaranteed low-risk level of financial reward Predictable.

-Fixed Indexed Preset minimum risk can change according to index like stock market medium profitability Will not sink below a set level.

-Variable tied to investment portfolio very higher risk of Potentially higher or lower profitability.


When, or best time to kickstart a School endowment Insurance policy and Life insurance Policy


We should get in mind that with long-term insurance plans commonly known as annuities for children-related policies premiums are at their lowest when the children are still in the tender ages and it may rise they grow older due to their exposures to more risk in life. Therefore once a child comes to life we are advised to get engaged in these two policies. The longer the term of the policy the more profitable the policy is to the benefactor. 

 

According to the Economics Time India in its May 29, 2019 bulletin, endowment plans, should be bought by individuals for, one, to protect and ensure their loved ones financially; two, for goal-based savings; and three, to build a corpus to fulfill an investment objective over a long period," 



All in all an endowment insurance plan is a long annuity insurance cover best for protecting our future financial risk. We can all agree the endowment insurance plan is best for our child/children’s financial wellbeing. We can set for a particular endowment insurance cover base on our future financial goal since it is an investment plan. ‘Early enough to start is better enough’.



Keep an open eye on our next write-up.



Newton Bezeng

Founder BeNew Insurance

Email: newtonbezeng@outlook.com

Website: https://benew.business.site

Blog: benewinsurance.blogspot.com

Facebook: https://web.facebook.com/Benewinsurance

LinkedIn: https://www.linkedin.com/company/benew-insurance

Twitter: @newtonbezeng



References 


Chartered Insurance Institute, (2016). Endowment policies.

https://www.cii.co.uk/learning/knowledge-services/reference-resources/classes-of-insurance/endowment-policies/


Elaine et al. (2020), Types of Annuities. Annuity.org.

https://www.annuity.org/annuities/types/


The Economics Time India, (2019). What is an endowment policy and when should you go for it. 

https://economictimes.indiatimes.com/tdmc/your-money/what-is-an-endowment-policy-and-when-should-you-go-for-it/articleshow/48465113.cms

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