What is Endowment Insurance?

Endowment insurance is a form of insurance that combines insurance protection with a savings plan for the owner. It is designed to pay out the death benefit when the insured dies during the term of the policy or survives at the end of the term.

Unlike a Whole Life policy, an endowment policy has a fixed maturity date where the policy will end. Endowment policies typically run for 10, 15, 20, 25 years or up to a certain age limit.

As it is a form of participating insurance, the policy does accumulate value. Thus, if no claim is exercised during the term of the policy, a lump sum known as the maturity value which includes the sum assured and bonuses will be paid out at the maturity date.

Features of Endowment Insurance:

• Specified duration of cover at the beginning/inception of the policy. The policy is said to mature at the end of the term.


• Cover would cease at the end of the term. If no claim is exercised during the duration of the policy, maturity value will be paid out.


• Typically acuumulates value at a faster rate or greater amount than other policies.


• Premiums are typically higher than Whole Life or Term policies.


• Policy may lapse if premiums are not paid in time and the policy has yet to accumulate bonus values, particularly in the first few years of the policy.


• Policy may have policy loan and non-forfeiture options.