Endowment Sale

Not as such, but the trade body Association of policy market makers allows you to submit your details to their 'member' companies who will then quote you, provided they think it can sell at over your present surrender value.

As I understand it

1) the process generally involves no fee to the seller [i.e. the buyer pays their markup]

2) one firm [Foster & Cranfield] auction the policy all the others 'market' it on your behalf. Thus Foster and co. will get to a definite offer price [which might not meet your reserve] by a fixed date whereas the others will endeavour to quote higher, and it takes as long as it takes to find a buyer in that case.

3) offers are subject to the caveat that 'bonus rates' declared on your policy don't change - which they can do, of course in this climate of regular bonus rate reductions. So if your provider cuts their declared rates, you can expect diffiulties with finding a buyer.

4) you must keep up payment of premiums on your policy until it is sold to keep it in force. Some [most? all?] these firms will add any premium amounts paid by the seller to the quoted value. You only lose interest for the time it may then take to sell.

Also, as I understand it

The way a quote is worked out is to take the current level of payouts on the maturing policies from your provider. They then discount this figure by a set growth factor [let's say 8%] and allow for the number and amount of premiums remaining. They then discount by the 'present value' of those premiums also [since they will be paid by the buyer, ultimately, not the seller] and that gives them what the buyer ought to be willing to pay 'today'. They will then dicount this figure by their markup and what is left they quote [but only if it greater than the surrender value you would get anyway]. Because of the rather 'niave' [in my view] assumptions made in these calculations [i.e. they assume that current bonus rates will not be cut further in the future] and the fact that a policy which is mid life has less bonus attached to it than a maturing one [and thus won't suffering much of a fall in surrender value where maturing policies can suffer a much bigger percentage fall] the possibilities of being offered much more than surrender values are much less than they were - and could dry up instantly. Conversely, if bonus rates were to start being increased again then the saleabilty and prices quoted could improve very sharply also.

HTH

[If anyone knows of firms that sell endowments who are not linked to APMM, could they add to this, thanks]