Endowment occurs when the policy's cash value equals the face amount and the proceeds are paid to whom?

• A. The policyowner
• B. The named insured
• C. The beneficiary
• D. The insurer

Answer: (A)

Endowment happens at the point the policy’s cash value has grown to equal the face amount, at which time the contract matures and the proceeds are paid to the policyowner—the person who owns and controls the policy. The policyowner has the rights to the cash value and to the policy’s benefits, so when endowment occurs the payout goes to them. The named insured is simply the life whose death would trigger the death benefit, and the beneficiary is the person designated to receive benefits if the insured dies (or, in some cases, the endowment if the policy is written to do so). The insurer is the company issuing the policy and making the payment.