Endowment policy is suitable for the individual who is conservative in risk appetite and cannot take risk. In addition, if there is a purpose which imposes on the requirement that no risk can be made, than an endowment policy is recommended. For example, tertiary education can be expensive and yet cannot be delayed once the child reaches certain age regardless of whether does the parents have the money for the tuition fee. An endowment policy for this case will be suitable provided a waiver of premium is installed for the parent (payer). Upon death, TPD or critical illness of the parent (payer), the endowment policy’s premium will become free and this will allow the plan to continue and mature as if premium was paid.
Other than the above reasons, endowment policy is not suitable. For young individuals who wish to save up for their retirement, it is best to invest in high risk instruments. Engage an investment adviser to help is also another viable alternative.
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