RSA Endowment

onojoko

In terminal decline (compensation already recieved a few years ago), given current market would it be best to tough it out or surrender and use the money to repay capital from the YBS capital and interest mortgage that we switched to in 2004?

EdInvestor

Post soime info

Guarantreeed sum assured
Dclared bonuses
Surrender value
Monthly premium
maturity date
Maturity forecasts
Mortgage interest rate

onojoko

Thanks for the reply, new to this - additional info

Sum Assured £65,000
Current surrender value £15,000
Monthly Premium £90
Start date 03/1992
Maturity date 03/2017
Maturity forecast 4% -£28,000/6% -£32,200/8% - £37,000
Current Mortgage with YBS, £30,000 fixed at 5.75% until May 09 then .75% above base.

Any suggestions of best course of action greatly appreciated

EdInvestor

onojoko wrote: »

Maturity forecast 4% -£28,000/6% -£32,200/8% - £37,000

If you surrendered this policy and used the lump sum to reduce the mortgage, also increasing the mortgage payment by the redundant premium amount, your return at maturity would be 34,381. This is much better than the likely return of the endowment (4% if you're lucky) and has no risk. So I would bin the endowment and proceed as above forthwith.

onojoko

This is what I suspected but it is great to have someone that knows about these things confirm this.

Many thanks