Endowment Loans.

qprfcmark

Hi,

Anyone had any success in recent months securing a loan against an Endowment. I have contacted my Insurer and they no longer offer this even though the current surrender value is £12,000 and I would want to borrow below this figure. I do not want to surrender it or sell it as it has only 5 years left until maturity following a 25 year term. Not even the Association of Policy Market Makers could get a quote for an increase on the surrender value!!! My last statement indicated it was on track to reach the sum insured. The endowment is no longer connected to a mortgage and is with Pearl Assurance. Any ideas?

Regards

Mark

EdInvestor

You are not likely to lose much if you surrender now.You will receive accumulated terminal bonus (if any).There is little point in holding to maturity.

qprfcmark

Ed………..Thanks for the reply, but the following will explain why I am keen on a policy loan rather than a surrender or open sale. The Pearl policy has what is known as the “Pearl Promise”. This states that………

“We promise that your maturity proceeds will not be less than your target amount provided that the average investment return achieved on the underlying assets between 1/4/01 and the maturity date of your policy, compounded annually, and after allowing for expenses and tax, is at least 6%”.

My last statement dated 31/12/07 was as follows:

Sum Assured £14,850.00
Existing Bonuses: £4,884.00
Total: £19,734.00
Plus Final Bonus: £1,460.32
Minimum Death Benefit: £30,000
Maturity Date: 1/5/14

Therefore being quoted £12K to surrender is pathetic bearing in mind SA+Bonuses = £19.7K + the Pearl Promise if SA+Bonuses do not equal Minimum Death Benefit at maturity. Any ideas regarding a policy loan Ed?