What Is An Endowment Life Insurance Policy?

Like whole life insurance, an endowment policy is a combination of protection plus savings; however, the endowment policy definitely puts the emphasis on saving up money rather than on protection.
An endowment policy guarantees the insured person cash in the face amount of the policy when it matures. This may be, for example, in eighteen or twenty years, or when he reaches age sixty-five. At maturity the insurance protection ends and he takes the money in a lump sum or in instalments. Frequently policyholders confuse their twenty-payment life policy with the higher-priced endowment.
If one bought a $20,000 twenty-year endowment at age twenty for $40.38 a month, it would be worth about $20,660 in twenty years, after which one is no longer insured. A $20,000 twenty-payment life policy bought at the same age for $33.60 a month would be worth about $13,360 in twenty years. One could take the money, or keep the $20,000 coverage, paying no further premiums after twenty years.
If one actually has an endowment, that word will appear on the policy. And one will be paying more for this type of policy.