Endowment policy

An endowment policy is a life insurance contract designed to pay a lump sum after a specific term (on its 'maturity') or on death. These are long-term policies, often designed to repay a mortgage loan, with typical maturities between ten and thirty years within certain age limits. Some policies also insure additional risks, such as critical illness.

Policies are either traditional with-profits or unit-linked (including unitised with-profits funds). With both types of policy, the value varies with the underlying investments, but the mechanism by which growth is allocated varies. The sum insured remains payable on death or other insured events.