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Whipsaw Glossary

Currently viewing the definition of: Endowment Policy
 
 
 A life insurance and savings policy taken out for a fixed term. The sum assured is payable at maturity or on death if earlier. Traditional endowment policies were on a with-profits basis. Each year a reversionary bonus is added to the sum assured and a terminal bonus is added at maturity. Neither bonus is guaranteed. Endowments were often sold in relation to interest only mortgages, whereby the policy would repay the capital at the end of the mortgage period. In recent years the sum assured plus bonuses has not been sufficient to repay the capital and so endowment mortgages are less popular.  
 


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    • Vesting
      Benefits arising from a share option plan or pension scheme must be made available to the employee within a certain period of time. The vesting period is the period before the shares are owned by the employee.