liverpool victoria endowment surrender

downshifter98

Hi

I have an endowment with 'LV' maturing next August & I'm getting nervous re the payout amount (for obvious reasons) - it started in 1989, premium is £37 monthly and the current surrender value is £18908 - apparently the 'mid' projection is £20,600 (but I guess that could easily decline!), so I'm wondering whether to 'cash' it in now. Does anyone of the learned people that frequent this forum have any views on whether this would be the right thing to do (and just to re-assure that I'm not contemplating anything really stupid by cashing it early.....). The endowment has no mortgage against it.

Regards Downshifter98

dunstonh

You would need to look at the current value, surrender value and remaining premiums to be paid to see if there is any benefit to keeping or not.

You mention the surrender value is £18,908 but what is the current value?

baby_boomer

What is the current value?

P.S. That's not a repeat of dunstonh's question, it's a question to dunstonh.

My gut feeling about LV a while back was that they liked to hang onto their money and perhaps invoked MVRs as protection or paid low sums for early surrenders more than they needed to. But new rules should now prevent this.

dunstonh

Current value is the value without surrender penalties. It indicates the cost of surrender.

Lets say the surrender penalty is £2000. With just under a year to go and if you are nervous about value then on a unit linked endowment you could switch into the cash fund and see out the remaining months on that. Therefore avoiding the £2000 penalty and risk of further drops. on a with profits plan you would know what the guaranteed minimum maturity is from the values and you could then compare the surrender value against that.

downshifter98

Hi dunstonh

I rang LV back and asked about the 'current' value but they claimed they were both the same! I tried to explain about the 'cost of surrender' and I was just told that 'no recent changes' had been made to the policy payouts; anyway I've requested 'claim' forms as there will be no harm done if I just ignore them.

downshifter98

downshifter98

And the remaining premiums total £333

Downshifter98

dunstonh

If the current value and the surrender value are the same then there is no cost of exiting now.

baby_boomer

Terminal bonus?

p1an0player

I was wondering the same, babyboomer

downshifter98

Well, I think thats what I was wondering; the projection of £20,600 was described as including all 'expected' bonus' and, for some reason, I have a feeling that the 'terminal' bonus is a changed beast nowadays - ie its not only paid at full term - but I could easily be wrong....

Downshifter98

p1an0player

If it's with-profits, the current stockmarket volatility won't affect you too much

What were the low and high projections?

If you have £333 remaining premiums it sounds like it might be worth keeping the policy going for a projected £1,700 increase