What is an Endowment Date in Life Insurance

In life insurance, some policies are endowment policies and include a specific endowment date, but all life insurance policies have an endowment date included in the policy. In the endowment policies, the date is normally much earlier and created to pay for specific needs.

Function

The endowment date is the date where the life insurance policy pays face value of the policy to the owner.

Face Value

The face value of a life insurance policy is the amount of money the policy pays in the event of death. In many cases, the face amount is the amount of money it endows.

Endowment Policies

Early policies often were endowment policies. These policies had higher premiums but they were endowed. As such, they paid the face value to the owner, and no death was necessary.

Uses

Endowment policy purchases were for college education, retirement money and other needs where a lump sum of cash or annuity was necessary.

Non Endowment Policies

Every policy has an endowment date. On traditional life insurance, it is the maturity date, often between the ages of 95 and 100. At maturity, most traditional policies pay face amount, although newer types of policies may pay more or less than the face.

Popularity

Because of tax changes, endowment policies are no longer popular.