Choosing between the many life insurance options for your family is a difficult and important decision. One type of policy you can purchase is the life insurance endowment policy. Life insurance endowments are considerably different from other types of life insurance for families, such as whole or term policies.
About Endowment Policies
With a life insurance endowment policy, you agree to pay for the policy until you either die or reach a certain age. If you die before you reach that age, the policy will pay benefits to a designated beneficiary. However, if you don’t die, you will receive the benefits yourself. You can then use the proceeds to pay for your own expenses, such as healthcare or housing costs. If you purchased the policy to insure the life of a child, the child can use the proceeds to pay for higher education costs.
Endowments Versus Whole Life Insurance
Whole life insurance policies provide death protection for as long as you live. Life insurance endowment policies, on the other hand, insure your life for a set number of years. Both policies will pay benefits when you die, but endowment policies may pay out before your death if you live to be a certain age.
Endowments Versus Term Life Insurance
Term life insurance provides death protection for a certain number of years. After the term is up, you must renew the policy, let it lapse, or convert to a different type of policy. Endowments also provide protection for a certain number of years but, unlike a term policy, you will still receive your benefits when the policy matures.
Choosing a Policy
No single life insurance policy is right for everyone. To choose the best policy for your family, consider your needs and future plans. If you have already made arrangements for your end-of-life expenses, you may not need a life insurance endowment policy. Conversely, if you have no such plans, an endowment policy may be a viable option for your family. An endowment policy may also be a good choice if you are purchasing life insurance for a child.