Endowment Policies
"Traditional" endowment insurance provides you with life insurance for a
specified period of years and then matures for a defined sum of money. This
sum, usually the face amount, is paid to you at the end of the period. If death
occurs during the term, the face amount is paid to your beneficiaries. An
endowment policy is something like a savings account. For example, you may buy
a 10-year, $10,000 endowment. At the end of 10 years the company will pay you
$10,000, either in a lump sum or in periodic payments. Because of the emphasis
on building a maturity value, and because the benefit is paid whether you live
or die, endowment policies cost more than other types of insurance. They have
declined in popularity in recent years.