Endowment Policy : Sell or Surrender

loops298

I have a 25 year endowment policy which was due to pay £40k in 2013. In reality the policy is due to pay in the region of £24k. I have been down every channel conceivable to get compensation for the shortfall and mis-selling, but have failed.

I am about to re-do my mortgage and have a number of options to think about. I am seriously considering cutting my losses, surrendering the policy now and reducing my mortgage with the proceeds. The surrender value is £17k. Another option is to sell the policy to one of the companies out there that is willing to buy it, as it is possible that I will get more money for it.

Has anyone out there sold a policy? Is it reasonabley straightforward and was it worth doing?

Any thoughts gratefully received :j

EdInvestor

Post some info about the policy

Provider
Guaranteed sum assured
Declared bonuses
Surrender value
Monthly premium
Maturity date
Maturity forecasts
(new) est interest rate on mortgage

Check here for ale quotes: https://www.apmm.org

loops298

Hi

The policy is with Scottish Life,
The sum assured is £40k.
I can't recall the declared bonuses (the policy is at home - I can check it later).
The SV is £17k
monthly premium is £52
Maturity Date is Sept 2013
I was advised on Tuesday that the maturity figure will be between £24K-£28k
I have been offered 6.18% interest rate on the mortgage

dunstonh

I was advised on Tuesday that the maturity figure will be between £24K-£28k

No endowment provider issues any information to say what the figure will be. All they issue are projections using three example growth rates. Those growth rates may overstate or understate the return that is possible within the investment.

For example, many endowments have been growing at an average in excess of 10% a year for the last 5 years. Yet the highest projection rate possible is 8%.

the projection rates alone are not enough to make a judgement on the quality of an endowment.

loops298

I asked the question of the adviser when I enquired the SV. So they are giving out estimates/projections!

Again, I have the figures at home for last years predictions.

If the projection rates are not enough to make a judgement of what to do, then what should I use?

My gut feeling is to get rid of it and use the money more wisely!

EdInvestor

loops298 wrote: »

I was advised on Tuesday that the maturity figure will be between £24K-£28k

If you cashed the policy in and used the lump sum to reduce the mortgage, also increasing the mortgage payment by the amount of the redundant premiums to maturity then your return would be 26,591.

This would be a guaranteed, no-risk return compared with the projected risk-based return of 24-28k.The Scottish Life fund is likely to perform at the low end of the range quoted as it is a closed fund.

dunstonh

The Scottish Life fund is likely to perform at the low end of the range quoted as it is a closed fund.

We dont know what investment funds the SL endowment is invested in. So, how are you able to make a judgement call on how it is going to perform?

I asked the question of the adviser when I enquired the SV. So they are giving out estimates/projections!

Again, I have the figures at home for last years predictions.

They are not predications. Example projections.

My gut feeling is to get rid of it and use the money more wisely!

Without facts you could be doing the wrong thing or you could be doing the right thing but it will be guesswork until the facts are known.

loops298

So how do I find out the facts? Or is that the information you requested earlier, which I am looking for at the moment (I currently have the 2006 bonuses to hand!)?

Also, what about the option for selling the policy. It has 5 years to run on a 25 year term. I presume there are companies out there that would consider the policy, or would that depend on the projected figures.

chaickenfan

To find out the sale value go to

http://www.apmm.org/

loops298

chaickenfan, thanks for the link, I have completed the form and wait with baited breath!


dunstonh, EdInvestor

As far as my policy is concerned, the information I have is:
Basic amount insured : £12800
Total Bonuses : £6796
Basic amount + bonuses : £19569

loops298

My projected values are :

3.5% - £26200
4.5% - £27700
7.5% - £32400

All below the £40000 promised (well....actually the £62339 I was promised by the Financial Adviser when I bought it )