Endowment policies
Cash Value Policies: Endowment Policies
Description Premiums Cash Value Advantages Disadvantages Uses
Guaranteed at-death proceeds; Guaranteed lifetime benefits equal to face amount at fixed date (such as age 65) Level premiums, payable only to the policy endowment date (date when cash value = policy face amount); Premiums among the highest of fixed premium policies Guaranteed build-up (much faster than Ordinary Life); Participating policies may have build-up beyond amounts guaranteed Greater forced savings (cash value = death benefits when policy endows); Guaranteed cash values; Income tax advantages Higher rates than other fixed premium cash value policies (thus, usually not suitable for young buyers with large pure protection need); Investment return usually marginal Buyers having a need for a fixed amount on a fixed date