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Endowment Insurance


A form of life insurance that pays the face value to the insured either at the end of the contract period or upon the insured's death. This is in contrast to life insurance, which pays the face value only in the event of the insured's death. It is also in contrast with the concept of a pure endowment, which pays the face value only if the insured lives to the end of the policy period. Endowment insurance is basically a savings plan with an element of insurance designed to protect the savings plan in the event of premature death. As such, this type of insurance is very expensive and has limited usefulness—for example, retirement saving, saving for the purpose of making a charitable contribution, and the establishment of an education fund for the insured's children.

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