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Endowment Plans Interview Questions & Answers - Learning Mode

Endowment Plans Interview Questions & Answers - Learning Mode

Endowment plans differ from term plans in one critical aspect i.e. maturity benefit. Unlike term plans which pay out the sum assured, along with profits, only in case of an eventuality over the policy term, endowment planspay out the sum assured under both scenarios ? death and survival. However, endowment plans charge higher fees / expenses ? reflected in premiums ? for paying out sum assured, along with profits, in either scenario ? death or maturity. The profits are an outcome of premiums being invested in asset markets ? equities and debt.

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Endowment Plans Interview Questions & Answers - Learning Mode
Try Endowment Plans Interview Questions & Answers - Exam Mode
Question: Will I get tax deduction for investing in Endowment Plans? Also is maturity benefit received from an endowment plan tax free?

Answer: Endowment plans are one of the most widely sold insurance plans.
Endowment plans offer a protective coverage during the policy term and also giving back a good corpus fund at the end of the tenure. Endowment plans offer tax advantages and you can avail deduction under Section 80C of Income Tax Act, 1961 for the premium paid up to the maximum annual ceiling of Rs. 1,50,000. All maturity benefits you may receive from such a plan are tax free as well the condition that premiums paid in any year Source:
Question: Which is a better option to invest in child insurance policy? ULIP or Endowment?

Answer: Insurance is usually taken against a person who is the earning member of the family. The reason is that if something happens to the earning member of the family, the dependents can survive with the insurance money.

Taking insurance for child is not right. What you are looking for is investment for your child so that when he or she grows and is ready to go to college, you can fund education. For this, you need to invest and not insure.

There are good mutual funds where you can start Source:
Question: What is the difference between a participating and non-participating insurance policy?

Answer: Insurance policies that are also equivalent to savings plan (for example endowment policies) are of two types; participating and non-participating.

Typically insurance companies give bonus over and above sum assured. When the bonus payment is clearly defined at the time of buying policy, by the insurance company, this is called non-participating policy.

In a participating policy, bonuses are not defined in the beginning but insurance companies might declare bonus payments from time Source:
Question: What are the documents i need if seeking a loan on my insurance plan?

Answer: You will need to furnish the original life insurance policy and submit the same with the bank or the life insurance company. You will also need to furnish a deed of assignment which ensures that benefits of the insurance policy will be assigned to the bank or insurance company during the loan tenure. Some banks also seek payment receipts of future premiums and a cancelled cheque to complete the documentation for loan against life insurance policy. Source:
Question: Are maturity benefits under the HDFC Life Super Income Plan tax free?

Answer: HDFC Life Super Income Plan is a monthly income insurance plan offering guaranteed income from a period of 8 to 15 years. The guaranteed monthly income is based on the guaranteed base income payouts which range from 8 to 12.5% of your sum assured on maturity. The regular income and maturity benefits are both tax Free under Sec 10(10D) of Income Tax Act, 1961.The plan has a limited premium paying term of 8, 10 or 12 years. Source:


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