Endowment
The different categories and structures of life insurance products.
What Is Endowment?
An endowment policy is a life insurance contract that pays the full face amount — called the maturity benefit — to the policyholder if they survive to a specified date (the maturity date), or to beneficiaries if the insured dies before that date. Endowments served as a forced savings vehicle for decades, combining life insurance protection with guaranteed savings accumulation. Because they are designed to pay out within a defined term rather than at death, premiums are significantly higher than term or traditional whole life. Single-premium endowments paid in a lump sum may be classified as Modified Endowment Contracts (MECs) under IRS rules, limiting their tax advantages.
Nevada Context
Traditional endowment products are less common in today's Nevada market; however, some carriers offer education endowments or retirement endowment structures. Agents in our network can discuss whether endowment-like structures fit your goals.
How It Affects You
Endowments offer guaranteed survival benefits but at a high premium cost. For most people, separating life insurance from savings through a term policy and separate investment vehicles is more cost-effective.
Endowment in Practice
A Nevada parent purchases a 20-year endowment to fund a child's college education; if the parent survives 20 years, the illustrative $100,000 maturity benefit is paid; if the parent dies sooner, the child receives the same amount.
Dollar amounts shown are illustrative. Actual amounts vary by carrier, applicant age, health status, and individual underwriting.
Related Glossary Terms
Related Resources
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