When you are looking for a good life insurance plan and whole life is not an option you might consider an endowment life insurance policy. An endowment life insurance policy is a term life policy where you are insured for a set period of time. If you should die during the period you are insured, your beneficiaries will get the proceeds. However, when you are searching for term life policies you will find that this type of insurance policy has and added benefit. It accumulates a cash payout over the years.
Therefore, if you do not die within the time you are insured you will be able to take out the money on its maturity date. Traditionally these types of policies have been taken out to provide funds for college or anything that a family may want money for at a future date. How much the cash value builds at any given time depends largely on how well the insurance company is doing with their investments. Endowments also provide cash surrender value if the insured cashes out before the maturity date. Though it is not recommended to use the endowment in this way, it can cushion a disastrous financial setback.
There are different types of endowments with different levels of flexibility for the insured. Full endowment policies will provide a cash surrender value equal to the death benefit. A unit-linked endowment often allows the insured to decide which funds their policy will invest in and how much will be invested. Traded endowments are endowments that have been sold to a new insured when the former policyholder has surrendered the policy; yet, there is still potential for growth and cash value accumulating within the policy. Finally, low-cost endowments are usually purchased to pay off the interest portions of mortgages, if the insured does not die beforehand.
Generally speaking when you compare term life insurance rates you are going to find that this type of term insurance is more expensive. The reason of course is because the typical term life insurance policy does not have an accumulated cash value. Term insurance pays the death benefit if the insured dies within the term of the policy. In the end, when you compare term life insurance rates you must decide if you want the most affordable coverage or coverage that will offer some additional cash back, but will cost a little extra per month.
Therefore, if you do not die within the time you are insured you will be able to take out the money on its maturity date. Traditionally these types of policies have been taken out to provide funds for college or anything that a family may want money for at a future date. How much the cash value builds at any given time depends largely on how well the insurance company is doing with their investments. Endowments also provide cash surrender value if the insured cashes out before the maturity date. Though it is not recommended to use the endowment in this way, it can cushion a disastrous financial setback.
There are different types of endowments with different levels of flexibility for the insured. Full endowment policies will provide a cash surrender value equal to the death benefit. A unit-linked endowment often allows the insured to decide which funds their policy will invest in and how much will be invested. Traded endowments are endowments that have been sold to a new insured when the former policyholder has surrendered the policy; yet, there is still potential for growth and cash value accumulating within the policy. Finally, low-cost endowments are usually purchased to pay off the interest portions of mortgages, if the insured does not die beforehand.
Generally speaking when you compare term life insurance rates you are going to find that this type of term insurance is more expensive. The reason of course is because the typical term life insurance policy does not have an accumulated cash value. Term insurance pays the death benefit if the insured dies within the term of the policy. In the end, when you compare term life insurance rates you must decide if you want the most affordable coverage or coverage that will offer some additional cash back, but will cost a little extra per month.
The author is Pete Loren who is working in magazines. The article is about endowment life insurance policy and compare term life insurance rates.
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