The one-sentence difference
An endowment plan has a guaranteed floor and a fixed maturity date; an ILP has no guaranteed floor at all and your account value simply tracks the market value of units you hold. Everything else follows from that.
Where the money actually goes
Endowment premiums flow into the insurer's participating fund, which is managed conservatively enough to support a guaranteed component. ILP premiums buy units in sub-funds you select -- often equity, bond, or balanced mandates -- and the insurer takes on none of the market risk; you do, directly and in full.
Fee structure
Endowment plans bundle their charges into the bonus mechanism -- you generally don't see a separate expense ratio line. ILPs typically show fund management fees and policy charges more explicitly, and because insurance charges rise with age and are deducted by cancelling units, the fee drag on an ILP compounds more visibly over a long holding period.
How to think about the choice
This isn't really "which is better" -- it's "how much guarantee are you willing to give up for how much upside." An endowment plan trades ceiling for floor. An ILP trades floor for ceiling. If you want market exposure specifically, it's worth comparing an ILP's total fee load against simply holding a low-cost index fund or ETF alongside a separate term life policy -- a structure some investors prefer for the same market exposure at typically lower total cost.
Can an ILP ever guarantee my capital?
No -- by definition, an ILP has no capital guarantee. If capital protection matters to you, that's the signal to look at an endowment or capital guaranteed plan instead.
Is an ILP just a unit trust with insurance attached?
Structurally similar, yes -- units in sub-funds, market-linked value -- but the insurance charges and policy-level fees are layered differently than buying a comparable unit trust directly.
See exactly where each product sits, side by side, on the interactive continuum -- no signup needed.