Endowment Insurance — a form of life insurance that pays the face value to the insured either at the end of the contract period or upon the insureds death. This is in contrast to life insurance, which pays the face value only in the event of the insureds death.
What type of policy is an endowment?
An endowment policy is a type of investment that you take out with a life insurance company. You pay in money each month for a set period of time, and this money is invested. The policy will then pay you a lump sum at the end of the term – usually after ten to 25 years.
Is endowment considered life insurance?
An endowment policy is essentially a life insurance policy which, apart from covering the life of the insured, helps the policyholder save regularly over a specific period of time so that he/she is able to get a lump sum amount on the policy maturity in case he/she survives the policy term.
What is the advantage of endowment insurance?
Endowment plans offer a disciplined way of saving money for future financial needs. An added advantage is the life risk cover which would be of great help to the family if something untoward happens to the main bread winner. The returns may be lower, but they are mostly risk free in case of guaranteed sum assured.
What is the purpose of an endowment fund?
Most endowments are designed to keep the principal corpus intact so it can grow over time, but allow the nonprofit to use the annual investment income for programs, or operations, or purposes specified by the donor(s) to the endowment.
Should I buy endowment?
Who should consider buying endowment policies? According to experts, people with a regular stream of income and need for a lump sum amount after a period of time may consider buying an endowment plan. Endowment plans provide a disciplined route for savings, which could come in handy in case of a financial emergency.