Endowment on Track but should we still surrender?

Juls48

Hi,

Hope you can help me here – we appear to be one of the lucky ones that has an endowment that is still currently on track to repay the required amount. However, as we seem to be paying a large premium each month, we wonder whether we would be better to surrender this policy and repay the outstanding mortgage with the lump sum and increasing payments?

Details are as follows:

Endowment Policy with Prudential (ex Scottish Amicable)
Home Purchaser plan – Unit Linked Fund (not a with profits fund)
Life assurance included– lump sum on death if earlier than policy end date
Not sure if critical illness included (think not?)
Date of maturity – Nov 2024
Value at 20/05/09 - £22k
Surrender value (today) - £26.4k
NO Guaranteed Sum assured
NO declared bonus
Monthly premium £273.60
Maturity forecasts – 4% £104k 6% £130k and 8% £163k
Target amount £92k

Outstanding mortgage is £75k
(currently repaying £43k repayment basis and £32k interest only)
Interest rate – base rate – so currently 0.5% and will follow the base rate

Hope this is enough information needed.

Thanks for your thoughts

dunstonh

I'm not suprised yours is on track. You bought at the right time and have been able to benefit from two periods of major unit price drops and bought many units in those periods which are now worth more than you paid for them.

Your mortgage rate is 0.5%. So, what would you benefit by repaying the mortgage with the endowment at this time other than security?

Will you need replacement life assurance (and possible CI cover)? How much will that cost?

EdInvestor

No point in swapping a unit linked policy at this stage in the stockmarket cycle when you are paying such a low interest rate.

Sit tight.

Juls48

Thanks v much for your replies - much appreciated.