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life asssurance

Endowment Assurance

Endowment Plans incorporate both investment and life assurance.

Endowment Plans incorporate both investment and life assurance and were often associated with protecting interest only mortgages. A unit linked Endowment Plan has a guaranteed death sum assured equal to that of an outstanding loan and the maturity value will be the total bid value of the units as at the maturity date. The monthly premium is calculated so that if the units grow at an assumed growth rate the maturity value will be sufficient to repay the outstanding loan in full. Therefore if investments outperform the assumed growth rate there will be a surplus upon maturity, however, if the return is less than that assumed, there will be a shortfall.