Life Insurance Quotes

Endowment

The Dictionary of Insurance Terms and Definitions

Endowment is the act of a life insurance policy issuing its death benefit.

The death benefit is divided up among the beneficiaries, as stipulated in the terms of the life insurance contract.  The policy owner has a great deal of freedom in specifying how the death benefit is to be distributed, choosing what amount goes to what party and where proceeds should go if certain beneficiaries are indisposed.

Usually, a life insurance policy endows because the person (or persons) insured by the policy dies.  However, that is not necessarily the case. 

Whole life insurance is designed to mature (terminate) and endow if the insured survives to a particular age (usually age 100).  If the insured reaches age 100, then, the policy will pay out and terminate.  When endowment occurs after this fashion, the policy's cash value will have grown equal in size to the policy's death benefit.

Taking advantage of an accelerated death benefit means that a policy will pay off early, but the death benefit will probably be reduced as a consequence of exercising this option.  If the life insurance company offers an accelerated death benefit, it means that when certain conditions are met, such as the incapacity of the insured or having the insured declared terminally ill, then the owner of a life insurance policy can elect to take an endowment while the insured individual is still alive.  Accelerated death benefits may only be available on particular policies or as part of a rider or not offered at all by the insurer of your choice.

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