Endowment Assurance

This policy provides a combination of protection (life cover) and investment. In insurance terminology, it is classified as a combination of pure endowment policy (investment) and a level (or decreasing) term policy (life cover).

There is a cash value/maturity value – (accumulated investment value), which is paid out to the assured on maturity of the policy. This is the investment portion. There is also a life cover for the duration of the policy, with a guaranteed sum assured in the event of the assured’s death before the policy reaches maturity or becomes paid-up.

On the death of the Life Assured before the policy is terminated or becomes a Paid-up insurance, the benefit payable will be the greater of:

• The initial life cover plus increases resulting from updates, if any, or
• The amount in the Investment Account (cash value) at the time of death.

This type of policy does not in effect have a maximum term. However, a policy that gives very long term moves closer to whole life. This therefore implies that an endowment policy with a very long term is taken with the emphasis on life cover whilst that with a shorter term such as 10 years is taken mainly for investment purposes.