Buy Endowment Policy – Your Investment In Your Future

2007-03-08 10:33:40

( Business )



The primary purpose that you buy an insurance policy is to cushion your family against a financial crisis which may result if one or both of the parents die. Young people who still cannot afford the higher premiums of whole life insurance can buy lower cost term insurance.

But if you want something better and can afford it, you may want to buy endowment policy for further security. An endowment policy is said to be similar to term insurance, because it sets a limited period during which payment for death is in effect. It goes beyond plain term insurance, however, because if death does not happen, then the amount insured is paid to the policyholder, either as a one-time lump-sum payment or as an annuity. In short, policyholders do not have to die to get the face amount of their endowment claims.

A typical endowment policy has a specific term of 10, 15 or 20 years, or it may specify an age such as 65 or 70, at the end of which the face value is paid as endowment compensation. When you want to buy endowment policy, however, you must be prepared to pay higher premiums. The premiums are higher than either pure term insurance (which pays benefits only if you die) or whole life (where you pay premiums until you die).

The main objective when you buy endowment policy is to build up cash values faster, within the agreed term, so you are really paying for a life insurance plan plus an accelerated savings plan.

The savings feature in an endowment policy is very attractive to parents who want to save money for their children’s college education, or to establish a retirement fund when they reach a specific target age, or some other future needs. In recent years, people who buy endowment policy use it to cover the mortgage on their home. These elements make for a wise investment in your future when you buy endowment policy to benefit your family.


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