Help please re endowment

Essex_Maid

Don't know what to do, ie cash it in or just sit it out:

Sum Assurred: £32,000
Maturity date 28/01/2010
Declared bonus: Nil
Annual bonus rate: nil
Monthly premium: £97.64 (but is paid by waiver of premium due to ill-health, so I am not actually paying premium at present)
Mortgage interest rate: 4.690%

Maturity foreecasts at 2009:

4% £22,800 {£9,200)
5.75% £23,100 [£8,900]

Maturity forecast in 2008
4% £27,400
5.75% £28,000

Royal London
Fund:
Managed Life Fund
With profit life /series 111


Value At 27/01/09 £17,256.21

Called today value £17,388.86 cashin £17,113.82
Value At 28/01/08 was £18,084
Not paying any terminal bonus at present

Not sure whether I should cash it in - but worried if I wait will go down even more.

Cash in value varies on daily basis.

As you can see the shortfall has nearly doubled in a year.

Any advice/thoughts appreciated. Any other questions I should be asking or the insurer.

THANK YOU.

Robert_Sterling_3

Its a guessing game!

EdInvestor

Essex_Maid wrote: »

Monthly premium: £97.64 (but is paid by waiver of premium due to ill-health, so I am not actually paying premium at present)

Maturity foreecasts at 2009:

4% £22,800 {£9,200)
5.75% £23,100 [£8,900]

If you took the cash in value and used it to reduce the mortgage @ 4.69%, your notional return at maturity would be 17,916.

Since you are not paying the premiums, it seems to me you may as well hang on to the policy for the moment to take advanatge of this free money.There would appear to be quite a chunky surrender penalty and the policy appears now to be rising in value.

But suggest you keep checking how it is doing. If there is no TB left then it can't fall much further.

Essex_Maid

When I phoned, the insurer I asked about the 4%, and was told that this was a guideline set/recommended by the FSA, and that in the current market that could not be guaranteed. Just worried that the shortfall, having doubled in the past year, could go up massively again. Thank you for replying.

EdInvestor wrote: »

If you took the cash in value and used it to reduce the mortgage @ 4.69%, your notional return at maturity would be 17,916.

Since you are not paying the premiums, it seems to me you may as well hang on to the policy for the moment to take advanatge of this free money.There would appear to be quite a chunky surrender penalty and the policy appears now to be rising in value.

But suggest you keep checking how it is doing. If there is no TB left then it can't fall much further.