What is a key characteristic of both endowment and term life policies?

Both endowment and term life policies share the characteristic of providing insurance protection for a specified period. In the case of term life insurance, coverage is strictly limited to the duration set forth in the policy, and it pays a benefit only if the insured passes away during that term. Endowment policies also have a specified maturity period during which the sum is paid out either upon the death of the insured or at the end of the specified term, which might be a certain number of years.

The concept of limited insurance protection inherent in both types of policies highlights their structured nature. While term policies focus solely on death benefit within the set duration, endowment policies offer a combination of life coverage and savings, but both ultimately center around a defined time frame for the benefit to be realized. This clear temporal structure distinguishes them from whole life policies, which provide lifelong coverage and accumulate cash value.