what's the difference between life insurance term policies and ...

by hirby

An endowment policy returns the face value of the policy to you at the end of the term. A term policy does not. In other words, a $100,000 term policy will pay $100,000 to your beneficiary if you die during the term. If you survive the term, nothing is paid. An endowment policy would pay your beneficiary $100,000 if you died during the term, and would pay you $100,000 if you survived to the end of the term. There will be a HUGE price difference between the two.

Term policies give you maximum coverage at very low premiums (i.e P1M for P6,000 premium) but these are like your car insurance…your money does not earn dividends and cash values…so you have to continue paying for life and will lapse as soon as you stop paying.

Endowment policies are policies that give you good cash values and dividends and usually mature after 10, 15, 20 or 25 years (you get to choose the maturity). These are more expensive but you can enjoy its benefits while you’re still alive… meaning these policies have living benefits.

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