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Endowment policies explained.
An endowment policy is a savings and life assurance policy for an agreed period. The minimum period is 10 years.
A tax free benefit is paid out at maturity or on earlier death (assuming a qualifying policy).
The policyholder may sell the policy in the traded endowment market, as an alternative to surrender before the end of the term, although this must be carefully considered as financial penalties will often apply.
There are charges on all endowment policies and the Key Features document from endowment providers will explain these.
Early surrender will usually incur further charges from the provider.
Endowment Policy Types.
Types of endowment policies include With profits, low cost, unit linked, low start, flexi endowment, and friendly society plans.
If you withdraw from this investment in the early years you may not get back the amount invested.
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