Guardian Royal Exchange - Freedom plan

DCLane

Morning everyone,

I've got a Guardian Royal Exchance / Guardian Financial Services Freedom plan. We've had this since 1992 and use it as life cover against the mortgage we currently have (£125k).

We're looking to raise some case and the savings cover on this is worth just over £4k.

Is it worth keeping? Or would we be better cashing this in?

Regards,

David

dunstonh

Check the cost of life cover to replace this plan. Once you see how much that costs, you will have a much better idea if the plan is worth keeping or not.

DCLane

Replacement cover is about the same cost, or I can keep the policy but take out the cash, maintaining payments into the insurance policy.

David

dunstonh

The old plan also has no guarantees that the funds would remain. They can get clawed back by GRE. If the new plan is guaranteed premiums and has no investment element, that may be the better option.

Remember that these old life plans were not savings plan. They built up a savings element when your life cover costs were cheaper (as you were younger) but then ate into the savings element later on in life when you were more expensive. They are generally priced on an assumption of high growth rates for a boom/bust high inflation economy. Which we no longer have.