Endowment insurance with a short-term 5-year premium payment and 10-year coverage is something that should be considered in our financial planning, especially when we want to protect ourselves and our families from various risks. This type of insurance helps us accumulate savings according to our desired amount within the specified time frame, and it offers high returns upon reaching the 10-year milestone. This enhances financial stability for the future.
Let's take a closer look at how endowment insurance with a short-term 5-year premium payment and 10-year coverage can enhance financial stability for us.
1. Short-term premium payment
Paying short-term insurance premiums may help some people with their overall financial planning better than paying long-term insurance premiums, especially for those who have plans to purchase various assets such as homes or cars that require monthly installments. If insurance premiums also need to be paid, it can strain their finances.
2. Long-term coverage
Short-term premium endowment insurance with a 5-year coverage and 10-year protection can be considered as providing relatively long-term coverage, even though the insurance premiums are paid only for the first 5 years. This eliminates worries in the event of unexpected circumstances, as the death benefit payout is typically higher than the total insurance premiums paid. This substantial amount of money can serve as an inheritance for family members, ensuring they can continue their lives.
3. Eligible for tax deduction
One of the conditions for using life insurance as a deduction for personal income tax is that it must have a minimum coverage period of 10 years. Therefore, short-term premium life insurance with a 5-year coverage and 10-year protection can be eligible for tax deduction. However, if there are annual cashbacks during the policy term, the cashbacks should not exceed 20 percent of the annual insurance premium. Therefore, before deciding to purchase short-term premium life insurance with a 5-year coverage and 10-year protection, we should consider the conditions regarding cashbacks.
4. Annual cash backs
Short-term premium life insurance with a 5-year coverage and 10-year protection may include annual cashback payments. When calculated, the received cashbacks often amount to a larger sum than depositing money in a savings account. For example, Ms. A, aged 37, takes out a short-term premium life insurance policy with a 5-year coverage and 10-year protection 'Ocean Life MakeSure 10/5'. She pays an annual insurance premium of 49,750 Baht and receives a cashback of 2,000 Baht per year. If Ms. A were to deposit the same amount of money in a savings account with an interest rate of 0.25 percent for a full year, she would receive only 124.375 Baht in interest.
Additionally, in years 6-10, when Ms. A no longer needs to pay insurance premiums, she will continue to receive the annual cashback of 2,000 Baht.
5. Reduce worries about inflation
We are all aware that the cost of living is increasing due to inflation, and many people are hesitant to increase their investments. As a result, they may choose to simply hold onto their money without experiencing any growth. However, if they take this portion of money and invest it in short-term premium life insurance with a 5-year coverage and 10-year protection, which carries low risk but provides annual cashback, it can yield greater benefits than saving alone.
For example, Ms. A, aged 37, takes out Ocean Life MakeSure 10/5 life insurance with a short-term 5-year coverage and 10-year protection. With a sum assured of 50,000 Baht, she pays an annual premium of 49,750 Baht for 5 years, totaling 248,750 Baht in premiums. Upon the maturity of the policy, she will receive a total benefit amount (including cashback) of 282,500 Baht. The significant difference amounts to 33,750 Baht. In contrast, if she were to deposit the same amount of money in a savings account with an interest rate of 0.25 percent, she would only receive 497.496 Baht in interest.
You can see that short-term premium life insurance with a 5-year coverage and 10-year protection offers numerous advantages. If you are looking for this type of insurance that can be applied for online, we recommend Ocean Life MakeSure 10/5 endowment insurance, which provides accumulation of assets and allows for a tax deduction of up to 100,000 Baht.
Remark:
* In case of death, the company pay benefit stated in the insurance policy or surrender value, whichever is greater.
% means the percentage of the sum assured.
- Underwriting is subject to the Company’s terms and conditions.
- Benefits and coverage are subject to the health insurance policy’s terms and conditions.
- Tax Deduction according to the rules prescribed by the Revenue Department
- This is only basic information. An insured should read aware of coverage condition, benefits, and exclusions of an insurance policy.
