Kolkata-based Subham (name changed), had two endowment insurance policies till recently. His father had bought these in Subham's name around the time he started his first job. Subham, who turned 30 last month, kept paying a premium of ₹50,000 annually for both the policies, with a sum assured of ₹10 lakh in total, till about six years. The policies were for a tenure of 20 years.
Recently, Subham consulted a financial planner for his overall needs. After looking at his portfolio, the planner asked him to consider surrendering his endowment policies. After a careful analysis of the policy details, his financial goals, affordability, and other aspects together with his advisor, Subham decided to surrender the two policies.
Insurance agents sell endowment plans aggressively as they earn high commissions on them. The commission on these endowment plans could be as high as 10-25 per cent or higher in the first year and about 5-7 per cent in the next couple of years. The commission for term plans is about the same range, but since it is a percentage of the premium, the amount earned is lower.
Product wise, endowment plans give low returns and offer low coverage for relatively higher premiums. Nevertheless, like Subham, most of us are tied with such plans bought early in our lives because of the insistence of friends or family. So, what do you do if you already have an endowment plan? Should you continue or surrender them? If yes, at what stage does it make sense to surrender such plans?
The Case For Surrender
Denne historien er fra August 2023-utgaven av Outlook Money.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
Allerede abonnent ? Logg på
Denne historien er fra August 2023-utgaven av Outlook Money.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
Allerede abonnent? Logg på
Stay Ahead Of AI-Powered Cyber Fraud
AI has become an integral part of our lives, right from customer service at banks to insurance claims. But it has now become a powerful arsenal for the fraudsters too who are increasingly using AI to scam individuals and corporations alike to commit fraud. The key is to stay vigilant
Travelling To Europe? Pack In The Essential Covers
Smart travellers must know that insurance is a must-have. From essential health coverage to theft protection and trip interruptions, know what you need for a worry-free Europe trip
How To Spend Wisely This Year-End
We all spend during the year-end. But the trick is not to overspend or borrow, either from friends, or your own investment, to fund your indulgence. Maintaining balance is the key
Travel Now Pay Later (TNPL)
Travel now, pay later (TNPL) is a close cousin of the more popular buy now, pay later (BNPL) schemes.
12 Books Devina Mehra Loved Reading In 2024
Listing books of her choice, among the ones she reads during the year, is ace investor Devina Mehra's favourite year-end activity. She says it's a daunting task to pick around 12 books from a list of 50.
Here's How To Avail Of Ayushman Bharat Yojana
Launched in 2018, the Ayushman Bharat Yojana aimed to provide health coverage to targeted benefi ciaries from the Socio-Economic Caste Census (SECC) 2011, based on deprivation and occupational criteria.
'Focus On The Business, Assess If You Want To Be A Partner For 10-20 Years'
Professor Sanjay Bakshi, a value investor, behavioural economist and adjunct professor at Flame University, Pune, gives his unique perspective on how to choose a stock, in an interview with Nidhi Sinha, editor, Outlook Money, as part of the Wealth Wizards series. He also shares his learnings from role models Warren Buffett, Charlie Munger, Benjamin Graham and others, and how being a chartered accountant, economist, investor and teacher make him into what he is today. Edited excerpts from the interview
The New Trump Card For IT, Pharma
Donald Trump has been re-elected as the 47th President of the US after a gap of four years. Here's how it will affect the Indian markets and how it will benefit sectors such as IT, pharma, export-oriented sectors and others
European Sojourn
Tight on budget? Dump the popular European destinations for the little-known wonders that are equally attractive
Gold ETFs And FoFs
While Indians love to invest in physical gold, even mutual funds offer the option, but in paper format.
