It can be quite confusing when looking for an insurance policy. You need to decide whether you want a life insurance policy or an endowment insurance policy.
Endowment Insurance Definition
Endowment life insurance policy is a savings plan whereby you contribute to a certain lump sum. You or your beneficiaries receive the lump sum after the expiry of the agreed period or your death, whichever precedes.
The minimum duration of endowment insurance is usually 10 years. During this time, in case you die or get terminally ill, the lump sum will be paid to your beneficiaries. However, if you outlive the policy, you get paid the lump sum upon maturity.
The insurer can invest the amount you pay towards endowment life insurance and upon maturity, the sum assured could also go up.
Life Insurance with Endowment Savings
The endowment insurance policies are of two kinds; insurance endowments with-profits and unit-linked.
Insurance endowment with profits is whereby your savings are polled together with those of other investors. Then the insurance company decides how to invest the money. It can choose to invest in shares or property. The returns from the investment are then shared among those who contributed to the investment.
In insurance endowment unit-linked you decide how your money will be invested. You are given a list of investment and you choose the one that you want. You can switch from one investment to the other without having to cash out your policy.
How Endowment Life Insurance UK Works
The endowment life insurance policy acts as long term life insurance and also as an investment. It also acts as security to your family in case of your death or terminal illness. Your beneficiaries will receive the sum assured in case our die or get terminally ill. With the endowment insurance UK, you can as well receive the amount in case you outlive the policy.
You have to make either monthly or annual payments towards your endowment life insurance UK. Some of the funds you contribute are used to purchase life insurance while others are invested with-profits or unit-linked basis. The amount to be paid out depends on how your investments will perform.
Life Insurance Endowment Policy Comparison
Before taking a policy, we advise that you to first use life insurance endowment policy comparison sites. You can also shop around and request the insurers to provide you with an endowment insurance quote. You then need to compare and find out the cheapest deal. Also, look at the terms and coverage of life endowment insurance.
You can get the endowment policy quote here. You can also sell your endowment before the maturity date. There are companies that buy second-hand endowments. When selling an endowment insurance policy, you also need endowment policy quotes from different companies to see where you can maximize your earnings. Most of the companies that trade in endowments want to buy with profit endowments. Other companies have restrictions such as the minimum surrender value when it comes to buying insurance endowment policy.
Additional benefits like critical illness cover, premium waiver, may be added on to the policy on payment of extra premiums. You need to choose these.
Payment for critical illness would need to be diagnosed and certified by the panel recommended by the insurance company. The following are some of the diseases generally covered under critical illness:
- Alzheimer's Disease Angioplasty
- Aorta Graft surgery Benign Brain Tumour
- Blindness Cancer
- Coma Coronary Artery By-Pass
- Deafness Heart Attack
- Heart Valve Replacement HIV/AIDS (under certain circumstances)
- Kidney Failure Loss Of Limbs
- Loss of Speech Major Organ Transplant
- Motor Neuron Disease Multiple Sclerosis
- Paralysis/Paraplegia Parkinson`s Disease
- Stroke Third Degree Burns
- Permanent Total Disability
Family Income Benefits
In this type of endowment insurance policy, the insurer makes regular payments to the beneficiaries after the death of the insured. The payment is made as per the agreed period in the policy.