3.5 Endowment Policies
To endow is merely to "furnish with an income." Endowment insurance is a type of life insurance that is payable to the insured if he/she is still living on the policy's maturity date, or to a beneficiary otherwise.
Endowment basically means the same as maturity when dealing with life insurance policies. In an endowment policy, it is the time when either the beneficiary or the policyowner is paid the benefits of the policy. An endowment policy stipulates a certain time in which the policy matures (usually at or over age 65). If the insured is still alive at the end of the endowment period, the policyowner is entitled to receive the policy benefits.
An endowment policy can provide a death benefit to the beneficiary or a living benefit to the policyowner.
Endowment insurance provides security while creating an asset - cash value. Cash values growing inside policies are not taxed during the growth period or as a death benefit.
