Definition of endowment mortgage - What is endowment policy

Endowment policy is a kind of insurance which is used to protect the principle of the loan which is issued for the mortgages.

It is the they endowment policy that ensures that the borrower of the loan will be able to pay back the loan with an insurance as a security
on the loan that has been issued to the borrower as a mortgage. When the borrower has taken this endowment policy, the borrower is required to pay monthly premiums for his or her endowment policy. This is for the security of the buyer themselves. But in UK, in last 20 years, the trend has moved in such a direction that endowment policies have been unable to payback to the buyer the amount enough to pay back the mortage amounts.

Reports have indicated that the uk endowment policies have been able to pay back only up to and around 35% of the mortgage in case the buyer was unable to pay back the mortgage. With that, the UK government recently took an initiative to protect the endowment policy buyers so that they may get a higher value out of their endowment policy they purchase. Hope the good times return soon and the endowment policies become capable to support the mortage buyers.