Endowments can be cashed in early and the holder then receives the surrender value which is determined by the insurance company depending on how long the policy has been running and how much has been paid in to it.

Endowment insurance is a form of life insurance which pays out once it matures, regardless as to whether or not the insured is alive. This is one of the most costly forms of life insurance, and it can be used in a variety of ways. As with other types of investments, it's a good idea to talk to an accountant or financial advisor before purchasing endowment insurance, to confirm that it is the best possible option.

Endowment life insurance can easily be used for personal needs, as a replacement income, because it can give your family a safe source of money to pay the bills and dues that won’t stop coming in case of your premature death.

In case you are a charitable person, you can use the endowment money to do good for others – you could name as your beneficiary a school, church or any kind of organization, making sure that your money will help others even when you are gone.

Another benefit of an endowment policy is that you could use it for business needs: an endowment insurance fund can make a business run with operational capital even if the key person dies. Actually it is a business capital because since it has a high cash value, you can get a loan against it to start your own business, meaning that your request for a business loan will not be rejected, and even more, you will get lower loan repayment rates.

A life insurance policy that provides benefits for a specified period (and that may be redeemed at face value if the insured is alive at the end of the specified period. Thus, payment is made regardless of whether the insured lives or dies, although the cost of the policy is quite high compared with other types of life insurance.

Low cost endowment (LCE)

A low cost endowment is a combination of: an endowment where an estimated future growth rate will meet a target amount and a decreasing life insurance element to ensure that the target amount will be paid out as a minimum if death occurs.

Function

When you purchase life insurance you are transferring the risk of loss to an insurance company, who spreads the costs of unexpected losses to many individuals. Realistically, only a small number of the insured individuals will actually suffer a loss.

Now in order to get this insurance, a contract is made between an insurer, an agent, and the applicant. The agent explains the contract to the applicant--usually the person applying is insuring themselves or someone with "insurable interest," like a family member or key business partner.

If you have further query please contact Canada Insurance Plan.