Term life insurance policy |
Endowment policy |
Provides coverage for a specified term |
Provides both life insurance coverage and savings |
Pays a death benefit if the policyholder dies during the term |
Pays both a death benefit and a maturity benefit |
Term life insurance policy provides only death benefit |
Endowment policy pays a maturity benefit if the policyholder does not die during the term |
Premiums for a term life insurance policy are generally lower than premiums for an endowment policy |
Premiums are generally higher for endowment policy as it provides both coverage and savings |
Term life insurance policy does not include any investment component |
Endowment policy includes an investment component |
Term life insurance policy does not include any savings component |
Endowment policy includes savings component |
May offer more flexibility in terms of coverage, as the policyholder can choose the term length |
Endowment policy sets the policy term |
Policy term is always shorter than the term for endowment policies. |
Policy term is longer than the term for a term life insurance policy, as the endowment policy includes a savings component. |
Premiums for a term life insurance policy are generally lower than premiums for an endowment policy, but the maturity benefit of an endowment policy is lower than the death benefit of a term life insurance policy |
Premiums for endowment policies are generally higher than premiums for a term life insurance policy and the maturity benefit of a term life insurance policy is higher than the death benefit of an endowment policy |