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Endowment surrender value dropping - sell or not?
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ShortFatBloke
Posts: 10 Forumite
My wife has an endowment policy with Legal & General.
The policy was taken out in 1988 to cover £40,000 and the payments are about £60 per month.
The policy is not used to guarantee any mortgage.
We do not have to cash in the endowment we could keep it on as an investment if necessary.
The policy is due to mature in 2013.
The surrender value in July this year was about £23.5k, the surrender value today is £20.4k.
My question is - should we keep the money in the endowment and continue to pay or should we take the hit, cash it in now and put the money into a high interest account?
Any help would be gratefully received.
The policy was taken out in 1988 to cover £40,000 and the payments are about £60 per month.
The policy is not used to guarantee any mortgage.
We do not have to cash in the endowment we could keep it on as an investment if necessary.
The policy is due to mature in 2013.
The surrender value in July this year was about £23.5k, the surrender value today is £20.4k.
My question is - should we keep the money in the endowment and continue to pay or should we take the hit, cash it in now and put the money into a high interest account?
Any help would be gratefully received.
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Comments
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What type of endowment is it?
Is it "with profits" or is it "unit linked"?
If it's unit linked then you will just get back the value of the units/shares.
If it's with-profits then there could be valuable bonuses attached and it might be worth keeping.
So more information is required before anyone could answer the question.0 -
ShortFatBloke wrote: »The surrender value in July this year was about £23.5k, the surrender value today is £20.4k.
If you didn't surrender then, why do so now ?Hi, we’ve had to remove your signature. If you’re not sure why please read the forum rules or email the forum team if you’re still unsure - MSE ForumTeam0 -
!!!!!!_here wrote: »If you didn't surrender then, why do so now ?
Good question - one I've been asking myself since then - probably because we didn't have to :rolleyes: .0 -
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http://forums.moneysavingexpert.com/showthread.html?t=1233879&highlight=norwich
Worth I read I would suggest.0 -
Or why didnt you surrender back in 2001-2002 when the stockmarkets dropped by more than they did this time round?
What is the motive for you wanting (considering) to cash it in?I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
As a matter of interest does anybody know how quickly changes in the stock market are fed into the value of a fund?
By that I mean the market is approx 7% down at time of writing so would the value of a policy be proportionally down at this moment in time now as opposed to close yesterday.
I appreciatte shares may not make up the whole of the fund and that the specific shares held in a given fund may not be representative of the 7% fall.0 -
ShortFatBloke wrote: »My wife has an endowment policy with Legal & General.
The policy was taken out in 1988 to cover £40,000 and the payments are about £60 per month.
The policy is not used to guarantee any mortgage.
We do not have to cash in the endowment we could keep it on as an investment if necessary.
The policy is due to mature in 2013.
The surrender value in July this year was about £23.5k, the surrender value today is £20.4k.
My question is - should we keep the money in the endowment and continue to pay or should we take the hit, cash it in now and put the money into a high interest account?
Any help would be gratefully received.
The majority of financial websites forums are suggesting selling.
Do you think things are going to turn around in a year, 2, maybe 3 years?
You can get 6.5% in the bank, save yourself the premiums as you say.
If it were me I would go for the safe, though irritating considering the 3K lost from last year, option.0 -
As a matter of interest does anybody know how quickly changes in the stock market are fed into the value of a fund?
On unit linked there is a days lag. On with profits there is smoothing which can take longer to appear when things are not so good or not go up as much when things are bad.The majority of financial websites forums are suggesting selling.
The basis of many of these comments are not on fact but on feeling. Too quick to call surrender/sell without knowng facts. The facts may still lead to a sell/surrender but many good endowments have been got rid of at a cost when there was no need to.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
Post some info about the policy
Guaranteed sum assured
Declared bonuses
Surrender value
Monthly premium
Maturity date
maturity forecasts
interest rate payable on mortgage (doesn't matter if the two are no longer connected)
Trying to keep it simple...
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