Mary Ang97748

What is Regular Endowment Insurance?

Endowment Insurance is another type of permanent insurance. It is designed to payout the death benefit when the insured dies during the term of the policy or survives at the end of the policy term.

It is designed to cater for those who wish to put aside a portion of income for long term saving while enjoying the insurance protection.

Unlike a Whole Life policy, a Regular Endowment policy has a fixed maturity date. Typical maturities are 15, 20 and 25 years up to a certain age limit (e.g. 70).

Features of Regular Endowment Insurance

1) The premium is higher than Term and Whole Life Insurance policies in view of its high savings/investment element.

Usually a fixed amount is payable on a regular basis (i.e monthly, semi-annually and annually) throughout the premium payment term (i.e 15, 20 and 25 years).

Lump sum payment (single premium) is also allowed.

2) If the insured is alive after the policy is matured, the maturity Value (normally will be the surrender value) will be paid to the insured.

If the insurance is cease before the maturity, the death benefit (normally will be sum assured) will be paid to the insureds family.

3) A total and permanent disability benefit is usually attached to an endowment policy as part of its basic benefit. Usually all types of riders are allowed to be attached to the policy.

Upon total and permanent disability, the sum assured is paid in installments, e.g. 10% - 1 st year, 10% - 2nd year, 10% - 3rd year and 10% - 4th year and 60% - 5th year.

4) Policy lapses if the premium is not paid within the 30-days grace period when the policy has not acquired any cash value (usually within three years from the date of inception

However, once the policy has acquired cash value, the insured can avoid having his policy lapse by activating the non-forfeiture option, such as a reduced paid-up policy.

5) Cash value builds up quickly and is payable should the insured decide to surrender/terminate his policy after a number of years (usually two or three years).

6) Non-forfeiture option is available once the policy acquires a cash value.

7) Policy loans are allowed once the policy acquires a cash value.

This feature enables the insured in temporary need of cash to borrow against the policy's cash surrender value. Interest will be charged on the loan.

Who this is for?

- For those seeking potentially high returns for your savings

Word of Caution from Kerry

- Buying an endowment policy is a long term commitment. An early termination of the policy usually involves high costs and surrender value payable may be less than the total premiums paid.

- If the insured commits suicide within one year of purchasing the policy, no claim can be made and the insurance company will only return back the premium paid without interest,

- Any disability or terminal illness caused directly or indirectly by any of the following occurrences, no claim can be made on the Total & Permanent Disability Benefit:

(a) Self-destruction or any attempted threat while sane or insane;

(b) Military or naval service in time of declared or undeclared war;

(c) Entering, operating, or servicing, riding in or on, ascending or descending from or with any aerial device or conveyance except while the Insured is in an aircraft operated by a commercial passenger airline on a regular scheduled passenger trip over its established passenger route or by the Republic of Singapore Air Force.

http://www.insuranceuniversity.com.sg/life-insurance-knowledge-center/regular-endowment-insurance.htm

# posted by maryang73248 : 11:41 PM