There are many choices when it comes to taking out life insurance; one option you may want to investigate is endowment life insurance. This type of plan is slightly special in what it offers. Whereas normal life insurance plans only offer death benefit, this plan will pay money out whether you pass away or not.
An endowment life insurance policy bears comparison to a term life insurance plan. Both of these policy kinds are active for a certain period of time, normally between 10 and 30 years. Whereas a term insurance plan only pays out should you die during that period, an endowment policy will pay out whether you live or die. Once the policy is due to end, the insurer will pay out a lump sum for you to use if you are still living. No further payments are received from a term insurance policy after the death benefit has been paid.
It is also possible to cash in an endowment life insurance plan before it reaches maturity. Doing so will result in your receiving a bit less than you would have if you have kept it going, but it means that you can take the cash at a time when you need it the most. Take for example, the following scenario. You have a twenty year policy and decide to cash in the plan after 15 years. This means that you will receive approximately half of what you would have done if the plan was left for the twenty year period. The value that you get when you cash in a plan will depend upon the details of the agreement when it was signed.
The major drawback of this type of insurance is that you are likely to have to pay a high premium than you would with any other kind. It is possible to get around this by getting a low cost endowment policy. This does mean lower premiums; however, the amount that will be paid out will decrease over time.
As another viable option, you could opt for a return of premium insurance plan. This is a relatively new concept on the market but delivers a win-win situation for you. The plan is also for a specified amount of time and the premiums will be monthly like the other products. Should you pass away during the policy period, your named beneficiary will receive the death benefit like all the other plans.
After the period has ended and you are still living, the insurer will pay back the premiums in full to you. The amount will be 100% of what you paid in as these payments are tax-free. If you decide to terminate the return of premium policy, then the insurer will pay back a partial amount of the money that you paid each month. With this insurance plan you can basically hedge your bets.
If you are looking to get lower premium quotations, then you need to know that there are a few factors that determine how much you pay. Age is a huge part when taking out in insurance. The younger you are, the more likely the premium will be minimal. This is one reason to arrange life insurance before you reach your prime. Insurers will also look at issue such as smoking. Non-smokers are generally paying 50% less on their premiums than those who choose to smoke.
All the information you need about endowment life insurance policies or return of premium plans can be found by contacting a financial expert of an insurer directly. Remember to ask all the questions you need to make sure you have all the necessary information to make an informed decision. If you have made up your mind which insurance policy is best for you, many providers have websites where you can fill in a form very quickly and easily.
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