Final answer:
Endowment insurance is a type of life insurance policy that provides both a death benefit and a savings or investment component. It offers financial protection and potential returns on investment.
Step-by-step explanation:
Endowment insurance is a type of life insurance policy that provides both a death benefit and a savings or investment component. With an endowment policy, if the policyholder survives the specified term, they receive the sum assured along with any accumulated bonuses or investment returns. If the policyholder dies before the end of the term, the death benefit is paid out to the beneficiary.
For example, let's say you purchase an endowment policy with a term of 10 years and a sum assured of $100,000. If you survive the 10-year term, you will receive the $100,000 plus any bonuses or returns. However, if you were to pass away during the term, the death benefit of $100,000 would be paid out to your beneficiary.
Overall, endowment insurance provides a combination of protection and savings, making it a popular choice for individuals looking for a policy that offers both financial security and potential returns on investment.
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