It's possible to save your money and provide an added life insurance benefit at the same time.
If you're keen to have life insurance in place but are concerned about spending all of that money without getting anything back at the end of the term of the plan if you don't die whilst it is in force, this sort of life insurance policy offers you an alternative.
Endowment life assurance plans (also available are similar plans called maximum investment plans or MIP's for short) are essentially savings policies that have a life insurance element built in. They pay out at least a known death benefit (known as the sum assured) if the policyholder dies before the end of term. Alternatively, if the policyholder does not die before the end of the term the maturity value is paid out to the policy owner.
This sort of policy was used for many years in conjunction with interest only mortgages but after bad press about the possibility of plans not paying out as much as was expected when they were set up when interest rates were far higher than they have been over the last 15 years means that very few plans are now set up for this purpose.
Instead, nowadays these plans tend to be set up much more often as regular savings plans with a known maturity date.
If you have an existing endowment plan that was set up to pay off your mortgage, you should review the plan to make sure that it is on target to do that. If it is not, you should review your ability to pay back the capital borrowed for your mortgage at the end of the term and take any remedial action that may be necessary.
