Insurance Basic Plans-What Is Endowment & Investment-Linked Policy?

Endowment policy An endowment policy combines a savings component with protection coverage. Endowment policies may be either participating or non-participating. Non-participating policies do not participate in the life insurance fund’s profits but all insurance benefits are fully guaranteed. Participating policies have a portion of insurance benefits guaranteed, however the total amount of benefits at maturity is not guaranteed because it depends on the insurance company’s life insurance fund’s performance. Investment-linked policy An investment-linked policy combines the elements of investment and protection based on your requirement as the policy owner. It offers flexibility as you are able to increase or top-up your monthly premium contribution as your income improves. You may also be more aggressive with your investment. An investment-linked policy will allow you to choose the types of funds your money will be invested in. However, like any other investment, there are risks involved and there is no guarantee on the returns, which may be higher or lower than the amount projected.