Two Types Of Life Insurance
If you’re on the lookout to buy insurance, you might be confused with the different types there are. Two types that will usually crop up is whole life and endowment policies. What’s the difference? Whole life policies are life insurance contracts that will pay you a lump sum only after your death. While endowment policies are life insurance contracts that are designed to pay a lump sum after a specified term. Typical maturities are ten, fifteen or twenty years. Generally, premiums are higher for endowment policies than for whole life. This is because the earlier you get a return of your money, the higher the risk for the insurance company. Also, endowments can be cashed in early or “surrendered”, whereas whole life can only be surrendered after a certain time frame, or not at all. With endowments, moreover, the insurance factor ceases after the lump sum is paid off, while whole life policies are meant to be that exactly, to last until the end of your life.
