What Is A Endowment Plan In Life Insurance? 
Endowment plans are designed to really push the cash accumulation inside your policy . Why would you want to do that ? I mean after all , the purpose of life insurance is to provide the survivor benefit you need , when it is needed , for the best price available . Each dollar of benefit literally costs pennies . It is a great deal . So how does cash fit into this picture ? It can be superb icing on the cake . Solid whole life products provide great guarantees on the cash accumulation . Solid whole life companies provide some hefty dividends on a non-guaranteed basics . Universal life can provide not only attractive cash accumulation , but some pretty interesting distribution options . And according to current tax law , all this money can be available with little or no taxation . -LRB- Ask your attorney if you dont believe me -RRB- . BUT certain rules have to be followed if you want to keep Uncle Sam out of the picture . An endowment contract could very well trigger a taxable event . When a policy endows , it could exceed the threshold of growth that the government authorities allow before they tax you . A pretty good sign this has occurred is when the cash value equals the death benefit . Is this necessarily bad ? It doesnt have to be . If you get the proper advice from your broker and your tax advisor , this could be a planned event in which you still benefit . Even considering the tax you will have to pay , you could still be way ahead of the game financially . However , if you really want to avoid a taxable event , your insurance company will help you . They really dont want to be sued by you or anybody else who mistakenly gets a tax bill you dont want to pay . They will give you illustrations to your hearts delight with all kinds of red flags screaming endowment ! endowment ! endowment ! You can then plan accordingly . To endow , or not to endow . That is the question :-RRB- 