What Are Full Endowments For Low Cost Life Insurance?

What Are Full Endowments For Low Cost Life Insurance

People think of life insurance as protection for their family in case of death, and although this is what life insurance is, there are also policies that have cash values and also work similar to a savings account. These cash values are called endowments and take time to mature.

Endowment Insurance Is Similar To Other Insurance Except…

In endowment life insurance policies the person receives protection during the course of the life insurance policy however at the end of the term the buyer can receive the refund of the premiums in an untaxable form. The premiums of endowment insurance policies are often high and are the reason why many people do not choose this type of insurance policy. However there is a way to get low cost endowments and that is by choosing an insurance policy that offers a lower endowment payment.

Low Cost Endowment Insurance Also Exists

The low cost endowment insurance plan has a higher term, usually between 10 to 20 years, and after that time the premiums plus a specified sum above that is given back to the policy holder when the policy matures. This is the ideal policy for people who want life insurance and would also like some sort of savings plan within their insurance policy.

Endowment Insurance Policies Carry Different Prices

There are different types of endowment insurance policies. These are categorized as full endowment, modified endowment and even low cost endowment. Your insurance provider will be able to differentiate and explain the different plans to you, but obviously, the full endowment policy will be more expensive than the low cost endowment plan and will pay out more at the time of maturity too.

What If The Policy Is Surrendered

Should the endowment policy be surrendered whether it is a full endowment policy or a low cost one, the buyer will receive a certain amount of money. This is known as the surrender value and is determined by the type of policy and the surrender amount the company applies to that policy.