That old chestnut about endowments

chiseljaw

The yearly statement from SL darkened my door again this week. Paid in £693.60 this last year yet the fund value is worth over £1,000 less.

Fund Value = £11,942
Surrender Value = £12,354

Monthly payments are £57.80 meaning I will have paid in £17,340 over the 25 year term which is due to end in 8 years time. Lowest illustration@ 4% suggests £20,200 at maturity net of Mortgage Endowment Promise which is suggested as being between £4,180 and £6,270 but could be £0.

Life cover of £42,750.

Mortgage is already paid off so do I really need to throw good money after bad for the next eight years? Should I invest the £5,548 I will save somewhere else on the assumption that I will at least get back the amount paid in to date i.e £11,791? I would obviously have to forego the MEP and any improved performance that may or may not happen in the next 8 years (although making the policy paid up would allow some benefit to accrue from this investment if I pursue this approach.

Any advice would be appreciated.

EdInvestor

I would take the surrender value and reinvest elsewhere, preferably in a tax free environemnt such as an S&S ISA.

yelf

definitely surrender it - you've got expensive life cover with a crap savings plan there