Investments
Endowments
An endowment is an investment policy with a minimum term, often five years. Tax is usually worked out inside the policy rather than on your own return. It can suit some people. It is not a better product by default.
Why someone asks about one
People usually look at an endowment for one of two reasons. Their tax rate is high enough that the way an endowment is taxed may compare well with paying tax in their own name. Or they want a structure that can play a part in estate planning, including naming a beneficiary on the policy.
Both reasons depend on your circumstances. A page cannot know your rate, your estate or how long you can leave the money. If you cannot commit to the term, say so. A flexible investment may be the clearer fit.
The term is the point
During the restriction period, access is limited and a withdrawal can have a cost or a tax consequence. Read that part before you are impressed by a projection. We will go through it with you.
As with any market-related policy, the value can fall. An illustration in a quote is not a promise of what you will receive.
General information only. This page is not personal advice and it is not an offer. Product rules, tax and your own circumstances decide what is suitable. Read the official documents before you decide.
Questions we hear
Who might look at an endowment?
Often an individual or a trust paying tax at a higher rate, or a person who wants a policy with a beneficiary as part of a wider estate conversation. It is a poor default for money you may need in the next year or two.
Is an endowment better than a unit trust in my own name?
Not automatically. The tax treatment, the term, the fees and your need for access all matter. We compare them for your situation. We do not rank them on a website.
Can I take money out during the five years?
There are usually restrictions, and there can be a consequence for taking money early. The policy document sets this out. Ask before you invest, not when you already need the cash.
Related
Tell us what you are planning for
A quote, a question, or a look at the retirement illustration. We reply from matt@ncj.co.za. What you read here is general information, not personal advice.