The Benefits of Endowment Life Insurance

An endowment life insurance plan is designed to pay a lump sum during a specific time period, typically on its maturity, or upon the death of the insured. It is a term life insurance policy paired with a savings plan.

About Endowment Life Insurance

An endowment life insurance policy means that it matures after a certain length of time, such as 10 – 30 years from when you purchased the policy. If you live beyond your policy’s mature date, then your receive the policy’s cash value. The death benefit amount remains the same, but the amount paid upon the maturity of the policy may be different. Typically, endowment life insurance is more costly than other policies, such as term life or whole life.

How to Use an Endowment Life Insurance Policy

People purchase endowment life insurance polices for a variety of reasons. Here are a few of the most common. Some people may purchase an endowment policy to work toward a specific savings goal. Others use it as a general investment.

Endowment Life Insurance is Risk Free

Endowment life insurance policies are risk free, meaning they do not have an investment risk. Keep in mind that as a safe investment, endowment life insurance usually provides low returns.

The Basics of Endowment Life Insurance

When purchasing endowment life insurance, you should understand the factors that weigh in on your premium price. Your monthly payment, also known as the premium payment, will depend on your age, gender and length of time you wish to have coverage. This portion covers the death benefit to be paid to your beneficiaries upon your death. The rest of your premium payment will be your investment. The lump sum you would receive once the policy matures is based upon this investment and how well – or not well – your investment did over the years.

Benefits of Endowment Life Insurance

Aside from the investment you are making, endowment life insurance offers a few additional benefits. The regular payments you make add up to the lump sum of your contribution. You have the option to invest, while preparing for your family’s future. You can choose from a range of investment options to determine where your funds will be allocated. Some companies allow flexibility in payments if you ever experience financial troubles.

Who Endowment Life Insurance is Best For

An endowment life insurance policy best suits a number of individuals seeking life insurance. It’s a good fit if you are looking to save money for a particular item, event or goal over a long period of time, such as a child’s education or charity donation. It’s also suited for those who wish to have a guaranteed payout at the end of the policy.

Endowment life insurance polices are a smart investment for those looking to have some savings coupled with a life insurance policy.