Should I surrender my Endowment?

dubhaird · 24 September 2008 at 4:01PM

I have an Endowment Policy which has 7 yeras left on its 25 year life. There is no mortgage associated with it any longer. Last year's annual valuation statement was the first time the ploicy was worth more than had been paid into it, but this year its value had declined by approx £1,000, A telephone valuation today revealed that 2 months on, its value had dropped by a further £300.

If I stop paying the monthly premiums what will happen?

Should I cash the policy in?

David_Aston · 24 September 2008 at 4:13PM

I'm sorry dbhaird, you are actually saying the guaranteed payout is decreasing? Even my pathetic twenty five year policy managed more than that. (I paid seventeen grand over the term, and it paid out twenty five in June just gone.) If you don't pay the premiums you will lose the life cover. With the mortgage paid off, perhaps that doesn't matter to you. How it can't have a guaranteed sum, plus earned bonuses to date which are themselves guaranteed I don't know.

hedgehunter_2 · 24 September 2008 at 4:21PM

I order to answer your question please post

The life company
The Sum Assured
The Annual bonus attaching
Any terminal bonus quoted
The current surrender value
The maturity date
The premium

If you stop the premium the polivy will become paid up for a reduced sum assured because you will not have paid all the premiums you originally agreed to over 25 years, therefore you cannot have the same benefits at maturity as someone who does pay all the premiums

EdInvestor · 24 September 2008 at 7:22PM

Please also post the maturity value forecasts.

Sailor_Sam · 24 September 2008 at 7:46PM

I thought the biggest part of any bonus always came at the end of the term. It seems silly to cash it in now, the value is almost certain to increase again, plus you'll get the final bonus.
I think unless you are desparate, and you have already said that the mortgage is finished, you should carry on paying into it.

David_Aston · 25 September 2008 at 5:29PM

Sam the final bonus is by no means a certainty. My earlier mentioned product stayed at the guaranteed sum plus existing bonuses for the last five or six years of it's life, and paid out exactly that amount. In that the OP's endowment has decreased in value, I wonder if it is unit trust linked, which could account for the decrease. Perhaps he/she will let us know.

Should I surrender my Endowment?

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