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Low-Cost Endowments and Endowment Mortgages
This type of policy includes the features of a life insurance policy and an endowment savings plan. As the name goes the objective of this policy is to repay the debts incurred due to a mortgage.
The idea is to make sure that sufficient amount is available to repay the whole amount of debt incurred in a mortgage after a specific period of time.

It is also to be understood that you should continue to pay the interest of the mortgage simultaneously while paying your insurance premiums. You will also be able to claim income tax exemption if you have excess cash even after repaying your mortgage. You have to arrange for funds to pay the mortgage if the money recouped is not sufficient to cover the same.

The insurance company will not accept any responsibility to pay any amount above the policy value whether or not you repay the mortgage. This factor and the steep decline in interest rates are considered to be serious drawbacks for this policy. By and large the policy has already lost its charm for these reasons.

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However many insurance companies have started of a procedure requesting employees to pay an increased premium if the market rate predicts that the current premium will not suffice to repay the mortgage. Since life insurance price have come down drastically consumers have started to detest this when compared with affordable life insurances.

Closing an Endowment Policy

You have an opportunity to make more money while surrendering your insurance policy if your policy has been in existence for a couple of years. There are lots of dealers in the second market who will help you to fetch a decent price. However for practical reasons like chances of getting a lower return it is advised not to surrender your policy unless they are inevitable.

Whether you need an endowment insurance policies or a life insurance policy depends on your financial needs and risks involved. You can seek the advice of charted accountant or a tax practitioner to know more details. Most of the insurance companies also offer affordable life insurances. You insurance agent will also able to suggest a suitable endowment policy.
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