what is the difference between life insurance and endowment insurance?

Question

i have life insurance for the past 15 yrs and am being sold endowment insurance along with it

Answer 1

Big difference. They are being used for different purposes. Life insurance protects you and your family financially in the unfortunate event of death/disability and whatever else you were insured for. Endowment policies on the other hand, is actually a savings vehicle which allows a systematic and organised form of forced savings. If you are being sold both things together, most likely the advisor is helping you recover what you have paid for your life insurance.

Answer 2

Life insurance guarantees a specified sum of money on the death of the insured person and it is payable to your chosen beneficiary.

Endowments provide for the payment (to the beneficiary) of the face amount upon the death of an insured during a specified period OR the payment of the face amount of the end of a specified period if the insured is still alive, whichever comes first.

For instance if you bought a 10 year endowment and you die within the first 10 years the monies would be paid to the insured, but if you are alive after the 10 years then you would be paid the face amount. Endowments are a kind of savings for retirement, but help protect you in case you die before then.

Hope I helped.

Answer 3

I don't know about endowment insurance, but I do know about modified endowment contracts. Life insurance is what it is, insurance on your life. If you die, we pay. What a modified endowment contract is is a whole life policy (one that is usually more expensive than term life and builds a cash value) that is purchased with a single premium instead of monthly premiums. This policy pays out a death benefit, based on the sex, age, and tobacco status of the client, much larger than the premium. Sometimes the death benefit can be more than 2 times the premium. You will find that the type of people who purchase this type of life insurance are older and have money that they want to pass onto their heirs tax free (assuming that their total estate is less than the IRS guidelines for the estate tax.) This policy does have certain tax consequences if the money is taken out prior to age 59 1/2 (a 10% tax penalty.) I only recommend this policy to individuals who have a sum of money they aren't going to use and want to pass a portion of their estate tax free.

I am Andy Armento, a Licensed Resident Agent of the state of Georgia.

Answer 4

I often end up writing the same thing on other sites

Answer 5

That's wrong

Answer 6

i don't know