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.