What is an Endowment Policy?

An endowment policy is an investment product which entails life assurance cover with a savings policy. The duration of the policy is agreed upon between you (the buyer) and your insurer, with the minimum term typically standing at 10 years, however this number is flexible and can be as much as 20 years.

An endowment policy is often taken out as a life assurance contract intended to pay a lump sum at the end of a specified term or upon death. The assurance aspect means policies will pay out in thecase of critical illness.

Generally, people take out life assurance if they are working towards a savings goal and are willing to endure the risk of short-term fluctuations to their investment. Tradition dictates that endowment policies were widely used to repay interest-only mortgages, however this has become far less common now.

CTA Form2
Compraison Works2

How the comparison works

1. Fill in the quick and easy form

Once you input your specifications and requirements into our online form, this data is then used to compile a list of the best endowment policies for your individual situation.

2. Speak to your advisor

Based on details such as your age, medical history, and policy duration, an advisor will contact you promptly with advice on the best endowment assurance deals for you to choose from.

3. Have your policy setup direct with the provider

Once your policy has been selected, you can then speak directly to the provider to quickly and reliably setup your policy – saving you time and money.

With profits basis

The sum you invest is combined with other investors’ money and invested by the insurance company in a variety of different ways including shares, property and fixed-interest investments. Returns are used to cover the costs of the insurer’s business and remaining profit is split evenly between the investors, through the declaration of bonuses which can send the value of your policy rocketing upwards.

Unit-linked basis

This method of investment affords you greater autonomy, as you choose from an assortment of investment options, the criteria of which are left to your own judgement. You can alternate between different funds without cashing in your policy, however a fee will be applied if switching between funds occurs often enough – usually over two times.

Logos Page Break 2 copy

The Best Providers

Your advisor will compare quotes from the leading life insurance providers in order to get you the lowest quote possible, while still ensuring that your life policy meets all of your requirements.

Advantages of Endowment Life Assurance

Cash-In Value

An endowment assurance policy will always pay out at the end of the allotted time period, regardless of untimely death. Most other life insurances do not have any ‘cash-in’ value and when the agreed-upon time period draws to a close, you end up waving goodbye to all the monthly or yearly payments you’ve paid for years.

Freedom Of Choice

The freedom you’re afforded in an endowment life assurance is substantial when compared to other life insurance products. You choose which funds to invest in, whether they are backed by the insurer or are open-ended investment companies (OEICs) managed by a third party.

Added Bonuses

As bonuses are added to ‘with-profit’ investments, the value increases in turn. These bonuses cannot usually be taken back following their attachment. However due to Market Value Adjustment (MVA) available as part of your endowment policy, it is possible to reach these bonuses if you cash in your policy early.

The Potential Risks

Market Fluctuations

The value of your unit-linked investments are subject to market fluctuations. You could end up with less than you put in. However with sound decisions you will be able to cope with market changes.

Policy Termination

Once invested, your money is not easy to get to, before the end of your policy that is. If you seek to end your policy prematurely, you will most likely face high costs as a result of penalty fees.

Fees

An administrative fee might be detracted from your monthly or weekly payments, depending on your insurer.