The final destination
Updated: Apr 8, 2020
Begin with an end in mind.
How much would you get when your Endowment plan matures in, say 20 years time?
Quite surprisingly, many of the individuals I met do not have a clear idea how much their policy pays them when it matures.
If you are not clear on the numbers, then that is not call financial planning, that is call throwing money away.
Did you know that most of the endowment plans are participating policies, which means there will be a non-guaranteed (bonus) component?
Guaranteed + Non-Guaranteed = Total Maturity Amount
The final figure on your policy consist of both Guaranteed and Non-guaranteed components. Guaranteed means a sure have, while non-guaranteed means it's just a projection that was based on past trend and current investment strategy adopted by the respective insurance companies.
However, past trends does not promise future performance. On a good note, bonuses are declared by the respective insurance companies on a yearly basis, and once declared, it becomes guaranteed.
#3 Tip: Know The Final Figures
Whenever any sales representatives presents a final figure to you, remember to take a closer look at the Guaranteed and Non-guaranteed components as that determine how sure you are towards your desired goal. If you are risk adverse, you may want to go for plans that give at least capital guaranteed returns.
Final destination should not be a horror movie to you.
P.s: Read other posts for more Endowment tips.