surrender or not ? and how and who to?

GinnyBubbles

Please help me, we were missold two endowment policies one index linked lloyds tsb and a legal and general one. On following the advice we claimed on both and many thanks to this site we won both giving a total of £2,000 compensation. Not great but certainly helped the debt situation. Now, the present situation is we have been advised to surrender/sell one of the policies, no one seems to want the Lloyds one and it's a mine field of which companies to approach. Sorry this is long winded but if anyone can advise i would be very grateful. Ali.

dunstonh

Lloyds one it unit linked and LTSB do have a fairly good range of funds on their plan (for a bank) and certainly offer good potential to hit target growth rate. A number of their plans were set up at 4.4% p.a. average target rate and these are quite desirable. What investment funds are you in?

Is the L&G unit linked or with profits?

GinnyBubbles

hi, thanks for replying, the lloyds one is index linked and the legal and general is with profits. I'm no good at legal, financial things - forgive my ignorance. Ali.

EdInvestor

Post some info on them and we can take a look


Guaranteed (basic) sum assured ( for L&G only)
Declared bonuses (for L&G only)
Surrender value
Monthly premium
Maturity date
Projected maturity values

GinnyBubbles

hi, thanks, guaranteed basic sum assured - £8,262.00,existing bonuses £4,488.80, plus £118.10 for 2004, monthly premium £38.30, surrender value, £12,730, matures 6/6/2014 all this is for the L&G policy. projected maturity values?? sorry, don't know as don't understand what it is. Ali.

EdInvestor

Hi Jock

If you surrendered the L&G one and put the money on deposit @4% also paying the premiums in to maturity you would end up with 21,714.

This compares with the current guaranteeed value of 12,868 which seems unlikely to improve by much.There may be a terminal bonus but it's not likely to be much either.

The projected values at maturity ( usually 4%, 6%,8%, or something like that)will tell you more about what L&G thinks you will get. Compare the projections with the figure I've given you for a cash deposit. if they are lower than the cash value or much the same, then there's not much poiunt in holding on to the policy and taking a risk, when you can get the same amount by surrendering and putting the money safely into cash - or by using it to pay off your mortgage early.

dunstonh

Back on the LTSB one, you should consider reviewing the funds. Having it all invested in one fund is old fashioned and poor quality investing. It also reduces the long term potential.

chrissiewants2save

has anybody got any suggestions as to where to start first as i'm thinking of selling one endowment. I have seen lots of adverts in the papers but haven't tried them yet- can they rip-off merchants?
thanks

EdInvestor

Not necessarily.Only some endowments can be sold though.

Ring them up and ask them for a quote.