Pure endowment/ Endowment assurance
- Pure Endowment provides a benefit on survival to a known date and hence operates as a savings vehicle
- Endowment assurance also provides significant benefit on the death of the life insured, operates as a vehicle of dependent protection.
Whole life assurance
Provides a benefit on the death of the life insured whenever that might occur.
Provides a benefit on the death of the life assured provided it occurs within the term selected at outset.
Normally don’t have any benefit paid on withdrawal.
Convertible/renewable term assurance
Combine a term assurance with the certainty of being able either to convert to a permanent form of contract (ie an endowment or whole life assurance) or to renew the original contract for a further period, all without further evidence of health being provided.
Involves a single premium purchasing an income stream, which commences immediately after purchase.
Can be used when there is the time between the date of purchase and the date when the income is required to start.
The contract can be paid for either by a single premium or by regular premiums during the deferred period.
Allows an individual to leave their accumulated fund invested and draw an income from it annually.
May be limits on how much can be drawn each year and an age limit at which point an annuity must be purchased.
Enables individuals to provide an income for themselves and their dependents during the period of long-term sickness or incapacity due to accident or illness.
Typically terminate at retirement age.
Provides a cash sum on the diagnosis of a “critical” illness as defined by the policy documents.
The contract can be used to help provide financial security against the risk of needing either home or nursing home care as an elderly person, ie post-retirement.
4 Investment types
Benefit involves a share in the surplus of the company
The benefit depends on the value of a unit fund
Benefit moves in line with a specified investment or economic index