Endowment Premium Calculator
An n-year endowment pays the face amount whether the insured dies during the term or survives to the end, so it is term insurance plus a pure endowment. Per unit its present value is A = (Mx - M(x+n) + D(x+n)) / Dx. The level net annual premium follows from the equivalence principle, dividing the net single premium by the temporary annuity-due (Nx - N(x+n)) / Dx. This calculator takes those commutation values (from a valuation table or our commutation function tool) and the face amount, then returns the endowment APV, net single premium, and level annual premium. Every commutation value is a user-editable input.
Endowment premium formula
Endowment APV = (Mx - M(x+n) + D(x+n)) / Dx
Net single premium = face * APV
Temp annuity-due a x:n = (Nx - N(x+n)) / Dx
Level annual premium = net single premium / a x:n
The death-benefit part is (Mx - M(x+n)) / Dx; the survival part is D(x+n) / Dx. The level premium spreads the single premium across the premium-paying years.
Endowment context
- An endowment always pays: on death within the term, or on survival to the end.
- The level net premium uses the temporary annuity-due as the equivalence denominator.
- Use a consistent mortality table and interest rate for all commutation values.
- Gross premiums add expense and profit loadings on top of the net figure.
- Shorter terms raise the survival-benefit weight and the premium.
Endowment premium: frequently asked questions
What is an endowment insurance policy?
An n-year endowment pays the face amount if the insured dies within n years, or the same amount as a pure endowment if the insured survives to the end of the term. It combines n-year term insurance with an n-year pure endowment, so it always pays out.
How is the net single premium found?
Per unit, the endowment APV is A = (Mx - M(x+n) + D(x+n)) / Dx. The first part values the death benefit during the term; the D(x+n) / Dx part values the survival benefit. Multiplying by the face amount gives the net single premium.
How is the level annual premium found?
Divide the net single premium by the temporary annuity-due a-double-dot x:n, which equals (Nx - N(x+n)) / Dx. This is the equivalence principle: the present value of level premiums equals the present value of the benefit.
Where do the commutation values come from?
Mx, Dx, and Nx come from a mortality table and an interest rate, available in a Society of Actuaries valuation table or via our commutation function tool. They are user-editable inputs because the correct table depends on the insured population.
Does this premium include expenses?
No. These are net premiums covering the expected benefit only. A gross or office premium adds loadings for expenses, commissions, taxes, and profit. The net figure is the actuarial baseline.
Official sources
- Society of Actuaries: SOA life-contingencies study materials.
- U.S. Social Security Administration: SSA Office of the Chief Actuary life tables.
Reviewed by the CalculatorHub team, edited by James Graham, 17 June 2026. See our methodology.