L&G endowment

2cats1kid

I have a feeling this one is too close to call on the "should I sell" front, but I'll run it by some of you experienced folks.

No longer covering mortgage, and I don't have urgent need for the money, which may tip it into the "suck it and see" category.

Policy matures 01/2015
Life cover 40,000
Basic sum assured 12,240
2007 bonus rate 1.25%
Total of basic+bonuses (to end 2007) 19075
Monthly premium 55.40

Phoned for a surrender value and was quoted 15,883 and asked what the current terminal bonus is and they said 67% (was 92% when the last statement came out). I have contacted the companies that buy endowments and best offer so far is 16,995, so they see more value in it.

I am thinking I should hang on for now and keep checking surrender values every few months - is this sound, do you think?

EdInvestor

Post the maturity forecasts and the interest rate you pay on the mortgage for a view.

2cats1kid

Yup, realised in bed last night I'd forgotten the forecasts LOL.

4% = 25,500
6% = 28,400
8% = 31,500

No mortgage.

EdInvestor

2cats1kid wrote: »

4% = 25,500
6% = 28,400
8% = 31,500

No mortgage.

Using an interest rate net of tax of 4.5% average for the period to maturity, if you cashed in and put the money on deposit at that rate also paying in the premiums, you would end up with 27,045 having taken no risk.

Unlikely the fund will return more than 6% over the period, so there's precious little risk premium left in the policy. Given that surrender values are on a downward trend in the immediate future, if you think it's more likely you will want to cash in, I wouldn't wait.