endowment assurance
Suppose you want to save a fixed lump sum by a target date — for a child's university fees in 18 years, or your own retirement at 60 — but you also want your family protected if you die before you get there. An endowment does both in one contract: it pays out either way.
An endowment assurance pays the sum assured at the end of a fixed term if you are still alive, OR pays the same sum to your beneficiary immediately if you die during the term. So it is mathematically a term insurance plus a 'pure endowment' (a payment that is made only if you survive the term). For example, a 20-year endowment for 100,000 pays your family 100,000 if you die in those 20 years, and pays you 100,000 at maturity if you live — guaranteed to pay one way or the other.
Because the contract is almost certain to pay (you either survive or you do not), endowments carry high premiums and behave largely like disciplined savings with a protection wrapper. They were hugely popular historically, especially tied to mortgages, but have faded in many markets as cheaper term insurance plus separate investing often delivers more. The actuarial honesty here: the 'savings' return inside an endowment is usually modest once expenses and the cost of the death cover are stripped out — it is convenience and discipline you are buying, not a high yield.
A parent buys an 18-year endowment for 80,000 to coincide with a child's university start. If the parent dies in year 9, the child receives 80,000 then. If the parent is alive in year 18, the policy matures and pays 80,000 for the tuition. Either path delivers the money.
Pays if you die OR if you survive to maturity — term insurance plus a pure endowment.
An endowment is not a magic 'free' savings plan: the guaranteed payout is funded by your own high premiums, and the internal return after costs is often lower than separately buying cheap term and investing the difference.