Clerical Medical with Profits endowment

readwrite

Hi, I’m now mortgage free and trying to work out what I should do with the Clerical Medical with profits endowment policy I still have running, details below:-

Provider's name : Clerical Medical
Sum assured : £14564
Declared bonuses : £5836.30
Surrender value : £13925.00
Monthly premium : £53.48
Maturity date : 15/05/2017
Maturity forecasts : 4% £22100.00 6% £25400.00 8% £29000.00



Should I surrender / sell, make the policy paid up and keep, or continue to pay premiums and keep for the duration as a savings policy? Am I wasting my money keeping this policy running? Would I be better off paying the premiums into a regular savings account?

I understand the Clerical Medical brand is to be discontinued and the fund is now closed to new business. What impact does this have on future returns?

Many Thanks

dunstonh

I understand the Clerical Medical brand is to be discontinued and the fund is now closed to new business. What impact does this have on future returns?

The brand is being discontinued and will be replaced with Scottish Widows. However, the Scot Wid product range is changing with them keeping some Scot Wid products and some CM products.

You have given us the basic sum assured. What is the target amount/life assurance amount?

readwrite

The target amount is £44000.00. I have no dependants so not worried about the life insurance.

Thanks

EdInvestor

I suggest you hold onto this policy until cash interest rates rise to the 5% level or more. You will probably have to pay a penalty to cash in right now and the return on cash is very low.

readwrite

What future affects will closing the fund to new business and discontinuing the Clerical Medical brand have on the investment ? Is the lower forecast of 4% £22100.00 a reasonable certainity ?

I suppose what I'm not happy about is the uncertainity of the investment. I know if I surrender / sell and put the money in a fixed rate bond then I'm a least guaranteed the interest rate advertised, with the endowment, I'm only guaranteed the the sum assured + bonuses to date and thats only if I keep the investment for the full 25 years. There is no guarantee of future bonuses or a reasonable terminal bonus.

Regards

EdInvestor

You need to ask about the investment mix of the WP fund to get an idea of realistic future returns.

Of course the point about a risk=based investment is that there is no certainty: and if you were able to get a guaranteed return of 5% (say by paying off a mortgage with the lump sum) then that would be the way to go with this policy.But with interest rates so low at present, cash, though certain, offers such a low return that its not attractive.

dunstonh

What future affects will closing the fund to new business and discontinuing the Clerical Medical brand have on the investment ?

Changing the logo in the corner will have no impact.