What About Endowment Policy?

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What Is Endowment Policy?

An Endowment policy is actually an insurance policy by which a stated amount is paid to the insured after the period of time specified in the contract, or to the beneficiaries in case the insured dies within the time specified .it can also be seen as a life insurance contract designed to pay a lump sum after a specified term (on its ‘maturity’) or on earlier death. Typical maturities are ten, fifteen or twenty years up to a certain age limit. Some policies also pay out in the case of critical illness.

Endowment policies cover the risk for a specified period at the end of which the sum assured is paid back to the policyholder along with the entire bonus accumulated during the term of the policy. It is this feature – the payment of the endowment to the policyholder upon the completion of the policy’s term – which rightly accounts for the popularity of endowment policies. Policies are typically traditional with-profit or unit-linked (including those with unitized profits funds).

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