Endowment Auctions

Pobby

Sorry if this question has been asked before.I see a lot of adverts from endowment auction houses.In general,I have been told that endowment policies are not such a good idea so why would they be worth more than the surrender value to another individual.Any ideas please?

EdInvestor

Two reasons: With profit endowments have a "guaranteed value" at maturity which is valuable, and also the surrender value does not reflect the exact value of the policy,which is higher.This is because insurers usually impose an exit penalty on those who don't stay till maturity to prevent them from taking more than their share from the WP fund.

Pobby

Thanks Ed.I see you say "guaranteed value" .I guess that`s the sum insured bit.

EdInvestor

It's the guaranteed sum assured plus the declared bonuses so far.Only applies to conventional With-profits endowments, not to unitised WP or unit linked ones which cannot be sold.