DEFINITION of 'Accelerative Endowment'

An option in a whole life insurance policy to use accumulated dividends to convert the policy into an endowment policy prior to its normal maturity date. An endowment policy provides for a lump sum payment to the insured after a certain period.

BREAKING DOWN 'Accelerative Endowment'

An accelerative endowment is a form of an accelerated option that allows policyholders to access the value of their life insurance policies prior to death. The lump sum received can be invested any way you want or it can be used to buy an annuity policy to generate some fixed income.

RELATED TERMS
  1. Unitized Endowment Pool - UEP

    A form of endowment investing that has mechanics similar to that ...
  2. United States Government Life Insurance ...

    A life insurance program established in 1919 to provide term, ...
  3. Policy Loan

    A policy loan is issued by an insurance company that uses the ...
  4. Traditional Whole Life Policy

    A traditional whole life policy is a type of life insurance contract ...
  5. Accumulation Option

    An accumulation option is a policy feature of permanent life ...
  6. Add To Cash Value Option

    A common benefit option on life insurance policies wherein the ...
Related Articles
  1. Financial Advisor

    Taxes on Endowments, How It Works

    Endowments and endowment funds are critical for non-profit organizations, and payouts are generally not taxable - but there are exceptions.
  2. Financial Advisor

    Here's How Schools and Charities Invest Their Endowment

    Each endowment has an investment policy statement, with topics on the mission statement, spending, investment, asset allocation and rebalancing policy.
  3. Tech

    Small Endowment Money: A $100B Opportunity

    A shift to outsourced management among small endowments is providing billions in opportunities to capture assets.
  4. Personal Finance

    A Career In Endowment Management

    The pay may not be as competitive as Wall Street, but the work environment, opportunity and knowing your helping out an educational facility makes this an attractive career.
  5. Insurance

    Life Insurance: Foundation to a Solid Portfolio

    Life insurance should be a foundation of an overall financial portfolio. Here's why.
  6. Investing

    'Smart' Money Ditches Some International ETFs Too Early

    Some endowments are missing out on some second quarter surges with select international ETFs.
  7. Retirement

    Beware the Sneaky Math of Universal Life Insurance

    Universal life insurance's cash value can be a cash cow – if there's any left. Read on to see if it'll work as an income source after you've retired.
  8. Personal Finance

    The Best Life Insurance for Military Families

    Two of the most common types of life insurance are term and whole life. Here's why the latter isn't a good idea for most military families.
  9. Financial Advisor

    Getting Life Insurance in Your 20s Pays Off

    Find out how Americans in their 20s can benefit from a well-thought-out life insurance policy, especially if they are able to build cash value for retirement.
  10. Managing Wealth

    David Swensen vs. Stephen Blyth: Tale of the Tape (DB, MS)

    Learn about the managers and specifics of the Yale and Harvard University endowments, with a focus on performance and asset allocation.
Hot Definitions
  1. Working Capital

    Working capital, also known as net working capital is a measure of a company's liquidity and operational efficiency.
  2. Bond

    A bond is a fixed income investment in which an investor loans money to an entity (corporate or governmental) that borrows ...
  3. Compound Annual Growth Rate - CAGR

    The Compound Annual Growth Rate (CAGR) is the mean annual growth rate of an investment over a specified period of time longer ...
  4. Net Present Value - NPV

    Net Present Value (NPV) is the difference between the present value of cash inflows and the present value of cash outflows ...
  5. Price-Earnings Ratio - P/E Ratio

    The Price-to-Earnings Ratio or P/E ratio is a ratio for valuing a company that measures its current share price relative ...
  6. Internal Rate of Return - IRR

    Internal Rate of Return (IRR) is a metric used in capital budgeting to estimate the profitability of potential investments.
Trading Center