You’ve likely established an investment portfolio, combining assets like stocks, mutual funds, or real estate. Yet, the question remains: are you maximizing all your options to safeguard and grow your wealth while actually enjoying your financial freedom?
Endowment insurance could be the missing piece that not only secures but also enhances your financial journey.
This article will guide you through smart strategies for using endowment plans to grow and diversify your portfolio effectively.
Key Takeaways
- An endowment insurance combines life insurance and savings, making it an ideal addition to your portfolio as it provides added financial security and flexibility.
- To grow your portfolio, it is best to start early, be consistent and strategically diversify your investments. Additionally, you can integrate risk management tools like insurance, including endowment plans. These can further enhance the resilience of your financial strategy.
- When choosing an endowment plan for your portfolio, consider your financial goals and look for a local provider you can trust.
Understanding endowment plans in the Philippines
Endowment insurance is essentially considered a life insurance, which is the second most popular type of insurance product in the Philippines as of 2023.
What makes endowment plans unique is that it combines the best of both worlds: guaranteed savings and life insurance. Endowment plans offer a lump sum payout either within or at the end of a specific term or in the event of untimely demise, making it a versatile tool for financial planning.
In the Philippines, various types of endowment plans are available, offering guaranteed returns, as well as limited pay options. For instance, AXA Philippines offers AXA Secure Future, a 7-pay endowment insurance.
Why endowment insurance plans are ideal for you
Here are some notable benefits that make endowment insurance plans an ideal addition to your investment portfolio:
Financial security with flexibility
Endowment plans offer the perfect mix of structured savings and insurance. It allows you to build savings that you can claim after a pre-defined span of time.
For single professionals, this can provide peace of mind and financial stability as you pursue personal goals and career milestones. Whether saving for a significant purchase, a dream vacation, or moving to a new apartment, endowment insurance can help provide for your needs.
Let’s say you aim to put up a business in the future. You can get an endowment plan with annual payouts to help you on your entrepreneurial journey. This plan will provide you with yearly returns on top of the fixed lump sum you set to be paid out after the term. Thus, you don’t need to use your emergency savings or other assets. Plus, you are insured throughout the term as you were saving up for your planned business.
Dual benefit
You don’t have to choose between protecting your wealth and growing it—endowment plans support both. These plans provide a guaranteed and fixed amount of return after the term. Some plans also offer regular payouts throughout the term.
Additionally, endowment plans provide a life cover, so your family will get a lump sum in case of your untimely demise. Through this, you can ensure a steady growth of savings while also safeguarding your financial future.
Strategies to grow your portfolio with endowment plans
- Start early and stay consistent
While you may already have investments, incorporating endowment plans early ensures guaranteed and fixed benefits over time. The earlier you invest, the sooner you can reap the benefits. It also helps you build structured savings, encouraging you to consistently pay your premiums. - Diversify your endowment portfolio
Just as with stocks or mutual funds, diversification can optimize returns. Consider blending long-term endowment plans, such as ones with a 20-year term, with whole life endowment plans. This can help you align your portfolio with your major life goals. - Maximize bonus payouts and dividends
Look for plans that offer annual payouts, dividends or bonuses. Select endowment insurance plans that offer guaranteed yearly payouts and/or dividends. This means you get returns yearly, which you can use for short-term goals or reinvest to further boost the value of your portfolio. - Reinvest maturity proceeds
When an endowment plan matures, use the payout to reinvest in higher-yield options or allocate them to other ventures where it may grow, like starting a small business. You can also opt to invest in short-term guaranteed instruments, such as bank time deposits. This way, you can use your savings and returns sooner.
Choosing the right endowment plan
Assess your financial goals
What are you aiming for? Whether it’s building an additional fund for your next travel adventure or business endeavor or saving for specific items you want to buy, understanding your objectives will help you pick the most suitable endowment plan.
You must also assess your risk appetite and your capacity to pay additional premiums. This is to make sure that the endowment insurance plan you’ll get fits your budget.
Compare endowment plan providers
Evaluate different providers based on their track record, offered benefits, and customer support. Look for plans with flexible terms and a good history of returns. It is also important to check how they process claims or payouts.
Consult with local financial advisors
Engaging a trusted financial advisor ensures you get personalized advice tailored to your portfolio and financial needs.
At AXA Philippines you can consult with a licensed financial advisors who provide expert insights to help you grow your investment portfolio.
Build your portfolio while enjoying your financial freedom
Endowment insurance plans provide an effective way to bolster your investment portfolios while enjoying the dual benefits of guaranteed growth and life protection.
Whether you’re looking to diversify, enhance your wealth, or empower your financial future, endowment insurance could be the strategic move you need.
Take action today!
Want to know more about endowment insurance plans? Discover AXA Secure Future. Talk to an AXA financial advisor or download our brochure to know more.
