Endowment

• A type of investment policy often used to build up a lump sum in the hope that there are sufficient monies to repay the capital element of an Interest only loan or mortgage at the end of the agreed term.

The policy also includes Life assurance, which would repay the loan or mortgage in the event of the borrower's death before the end of the agreed term.

The terms of an endowment policy will vary from contract to contract.