These are basically a mix of savings, investments and life assurance "wrapped up" into an insurance policy. Got that?
The basic idea was that you got a mortgage on which you were only paying off the interest payments of the loan. So the capital sum - the actual loan you originally took out - was not being repaid at all.
However the plan with that was to be paying money into an endowment policy. This would be making you money on the side. It would do so well that when it came to the end of your mortgage you would be able to use your endowment to pay off the capital sum.
Got that? Well don't waste too much time trying to. Endowment mortgages were very popular in the 80s and 90s but, they've resulted in a lot of trouble because the "side" or "by product" endowments did much worse than expected for many people. (In other words the property was not theirs because they won't couldn't pay off the loan).
This resulted in yet another personal finance scandal. Huge amounts in compensation have been paid.
There is now a different type of mortgage which has taken the place of endowment mortgages - the interest only mortgage. This operates under similar lines see the quick guide to interest only mortgages.
Compensation Claims for Endowment Mortgages
If you want to see if you can claim that you were mis-sold an endowment policy call the Financial Services Authority. (Tel. 0845 606 1234).
Getting rid of your Endowment
If you have an endowment and want to get rid of it you can "sell" it. This could be to the company that sold it to you originally. However you might make more by selling it on the open market. There are a lot of firms who will do this for you. Check Google. But do shop around for the best deal. Always get three quotes.