This type of endowment provides a guaranteed level of withdrawals for a fixed term, with the balance of the capital payable on the maturity date.
The amount of capital payable on maturity will depend on the performance of the fund that the product is linked to.
The term ‘guaranteed’ refers to the income and not the invested capital. Withdrawals are often annually in arrears. It is a pure investment contract for clients wanting a fixed income.
Although the withdrawals are often thought of as income, they are actually a return of capital.
