Is buying and selling insurance allowed in Islam? Is a life endowment policy allowed in Islam? Please explain.

Praise be to Allah, the Lord of the Worlds; and may His blessings and peace be upon our Prophet Muhammad and upon all his Family and Companions.

We do not know the kind of insurance you are asking about.  To avoid Haram dealings some Muslim brothers engage in cooperative insurance, which is rarely practiced.  The known and common insurance is the commercial insurance, which is forbidden.  For more details about both kinds of insurances, please read the Fatwa: 81425.  Know that any involvement in commercial insurance is forbidden.

As for your question about Waqf (endowment) it is highly recommended in Islamic Shariah.  It means preserving the assets and making their benefits in the public interest.  There are many benefits from endowments. Some of them are the following:

1) It is very beneficial for those who are recipients of it.  Sometimes the Waqf is made for Mujahideen, sometimes for scholars, or needy, and poor people, or for mosques, etc.  Those for whom it is dedicated use it to fulfill their necessities. The need and importance of Waqf has becomes more emphatic these days when many governments are no longer sponsoring the above categories.  The Prophet (Sallallahu Alaihi wa Sallam) said: "When a human being dies, all of his deeds are terminated except for three types: an on going Sadaqah (endowment), a knowledge of Islam from which others benefit, and a righteous child who makes Du’a for him." [Muslim, Ahmed and the Imams of Sunan]

Allah knows best.