Suitable for long term investment (with an element of guarantee)
Single parent age 30-1 child (possibly investing all or some of the child benefit payment)
Married couple both 32 no children
Married couple in their 30's with 2 children aged 5 & 8
Married couple in their 40's with 2 children in school/university
This contract has a fixed term of years decided upon at the outset. The benefit under the policy is payable either on death during the chosen term or at the end of the term if the life assured survives until then. The policy therefore fulfils two needs-that of cover against early death during the term and saving towards a lump sum at the end of the term should the life assured survive. Because of this dual benefit and because all policies will end in claims, this type of contract is the most expensive of all.
Endowment assurances are used mainly to provide a lump sum at some date in the future, usually between 10 and 30 years ahead. However, it can be used to repay a house purchase mortgage where the policyholder pays only interest on his mortgage where policyholder pays only interest on his mortgage and no capital is repaid. The endowment assurance benefit will be equal to the amount of mortgage and will be available to repay the loan in the event of a death of the life assured or at the end of the chosen term if death has not occurred.