A traditional life insurance policy pays the beneficiaries of the policyholder at the time of the policyholder's death, whereas an endowment policy pays the insured if he or she is alive on the future (maturity) date named in the policy.
There are two different types of life insurance policies that policyholders may opt for depending on the policyholder's needs and requirements at the time:
- A traditional life insurance policy pays the beneficiaries of the policyholder at the time of the policyholder's death.
- An endowment policy pays the insured if he or she is alive on the future (maturity) date named in the policy.
- The maturity date specifies the time period in an endowment life insurance policy.
- An endowment policy is different from a life insurance policy in that it allows the policyholder to save regularly over a period of time as the period of endowment in the life insurance matures.
- The essential difference between a traditional life insurance policy and an endowment policy is that the former pays the beneficiaries at the death of the policyholder, while the latter pays the insured if the policyholder is alive on the maturity future date named in the policy.
Therefore, a traditional life insurance policy pays the beneficiaries of the policyholder at the time of the policyholder's death, whereas an endowment policy pays the insured if he or she is alive on the future (maturity) date named in the policy.
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