An endowment is a life policy or contract that pays a stated amount to the owner or beneficiary after a fixed term or at a specified age, or upon earlier death. Classic endowments have largely been replaced by modern permanent insurance and annuities, but the concept persists in savings-oriented designs and in academic or charitable funds that spend a set percentage while preserving principal.

Advisors rarely sell classic endowments but may encounter legacy contracts maturing at a set age. Options include taking proceeds, extending coverage if allowed, or exchanging via 1035 to modern products. In charitable settings, endowment funds are invested to support a spending policy while preserving purchasing power.