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Endowment Life Insurance

An endowment policy is a type of insurance that works in a similar way to an investment or savings plan. It is one of the more expensive insurance solutions on the market but the benefit is that the policy holder is guaranteed a pay-out at the end of the term.

Endowment policies are similar to term policies as they only cover the holder for a predetermined amount of time, but the fact that there is a guaranteed pay-out differentiates it from term life insurance.

You may not lend against your endowment policy and the amount paid in is generally locked up until the end of the agreed term. If you do attempt to access the funds before the end of the term you could face charges and penalties as well as tax payments on the amount accumulated.

There is a certain amount of risk involved when taking out endowment policies. There is always a minimum guaranteed payback amount but this may be a lot less than you have put into the policy over the years. The value of the investment can fluctuate during its course so make sure you sought out the best deal before going ahead with a policy.


  • There will definitely be a lump sum pay-out in any eventuality
  • Your pay-out is not taxable as your payments are internally taxed
  • You can decide on the term
  • You can save for a long term goal
  • Your minimum pay-out is secured