Accelerative Endowment

What Does Accelerative Endowment Mean?

An acceleration endowment is a method of arranging the dividends of a life insurance policy to effectively convert it into an endowment policy. Over time, the dividends accumulate, allowing the insured to receive a lump sum after a specified period, even before the policy reaches its original maturity date. Because the dividends fueling the acceleration come from the policy’s own cash value, this arrangement is generally only possible with permanent life insurance rather than term coverage.

Insuranceopedia Explains Accelerative Endowment

The main benefit of accelerated endowments is that they give the insured the option to receive a lump sum of money before their death. This contrasts with other life insurance options that only provide benefits upon the insured’s death. The lump sum allows the insured to make additional investments or earn a fixed income later by purchasing an annuity policy. Alternatively, the insured can simply keep and use the money as they prefer. How much money actually accumulates depends on the dividend performance of the underlying policy, so it pays to compare offerings from the best life insurance companies before buying a participating policy you plan to hold for decades.