Pure Endowment

A Pure Endowment is a policy that exists for the purpose of investment only.

The purpose of this kind of policy is akin to a savings policy, with an accumulated lump sum at maturity.

If the life assured were to die before the maturity date then his beneficiaries would receive the value of his contributions plus all the investment returns earned, less expenses charged by the life office.

This policy is often sold as an educational policy to provide for a proportion of school fees in the future. Here the facility of partial encashments of the policy is used to allow the policy owner to withdraw some money from the policy to provide for school fees.

Pure endowment policies can also be used to accumulate funds for personal pensions. Minimum term for this product is five years.