Definition and Types of Policies. All the policies dis-
cussed in the three preceding chapters provide for the payment
of the full amount of the policy only in the event of death.
Endowment policies, on the contrary, provide not only for the
payment of the face of the policy upon the death of the insured
during a fixed term of years, but also for the payment of the
full amount at the end of said term if the insured be living.
Whereas policies payable only in the event of death are es-
sentially taken out for the benefit of others, endowment poli-
cies, although affording protection to others against the death
of the insured during the fixed term, usually revert to the
insured if he survive the endowment period. Such poli-
cies, therefore, have become popular in recent years as
a convenient means of accumulating a fund which
will afterwards become available for the use of the policy-
holder.
An examination of the contracts issued by different com-
panies shows many variations in the use of the endowment-
insurance principle. Such policies may be made payable in
ten, fifteen, twenty, twenty-five, thirty or more years, or the
length of the term may be so arranged as to cause the policy
to mature at certain ages, such as 60, 65, 70, etc. When
written for such terms the purpose of the policy usually is to
combine immediate protection with saving: while if written
for long terms or to mature at an advanced age the object
is usually to combine protection with old-age provision. Usu-
ally the contracts are paid for by premiums (payable an-
nually, semi-annually or quarterly) continuing throughout
the term, but if desired the premiums may be paid on the
limited-payment plan, as, for example, a thirty-year endow-
ment paid-up in twenty years.
Other applications of the endowment principle have already
heen referred to in the chapter on " Classification of Policies,"
but may again briefly be recapitulated. Thus there may be
" double endowments " or " semi-endowments," the first
meaning that the amount payable upon survival is twice that
paid in the event of death, and the last meaning that the sum
payable upon survival is only half as large as the amount
promised upon death. Various kinds of "child endowment
policies" are also issued by certain companies. Sometimes
these policies, besides guaranteeing the payment of a fixed
amount upon the attainment by the child of a specified age,
also provide for the return in full of the premiums paid in
the event of the child's death before reaching the endowment
age. Or, the policy may be issued without the return of
premium privilege in the event of the child's death, the only
benefit, under the policy in this instance being the amount
payable on survival. Sometimes it is provided that upon the
death of the purchaser of the policy, usually the father,
premium payments shall cease, the policy becoming full-
paid and the principal becoming due when the child reaches the
endowment age. In still other instances the policy may be
issued on a child's life at an early age, say at age five, the un-
derstanding being that the policy will not come into full force
until the insured reaches a specified age (say age 21) and will
then mature as an endowment at, say, age 50. These policies,
furthermore, may again be issued with or without the return-
premium privilege.
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