Zurich Endowment Policy help required please

sharpys_gal

I have an endowment policy and I am looking for advice as to whether to surrender the policy or to keep it running to maturity. Details are as follows;

Zurich policy
Death benefit £60,000
Basic Sum assured £16,200.00
Declared Bonus £5062.85 as at 31/12/08
Surrender value £16236.00 as at 29/01/09
Monthly payament £70.60
Start date 10/01/1992
Maturity date 10/01/2017
Maturity projections 3% £26,700 and 5% £30,800

My mortgage is now Paid off, and I am using this purely as a savings tool.

Any help would be much appreciated.

Thanks

EdInvestor

What will you do with the money if you cash it in?What savings rate would you expect to get (net of tax)?

sharpys_gal

At the moment I'm getting around 2-2.5% net on savings but the funds could be used towards buying another property.

I am therefore trying to ascertain if it is worthwhile me continuing to pay the £70.60 per month for another 8 years - what would the return be?

Thanks

EdInvestor

sharpys_gal wrote: »

Maturity projections 3% £26,700 and 5% £30,800

Let us assume that over the next 8 years it will be possible to achieve a net return of 4% on the money either in a savings account or by putting the money towards a new mortgage.

If you surrendered the policy and achieved that 4% over the period by investing the lump sum and the premiums, your total return at maturity would be 30,240.

This is virtually the same as their forecast at the higher rate of 5%, but with no risk.There does not thus seem to be much point in keeping this policy.If you need the life cover, replace it before you surrender.