AMP Endownment Policy

Hornet

Hi - I have an AMP endownment policy which has 13 years to go on it - is it worth paying into this any more? It was originally taken out as a Pearl policy.

I have read a few comments from others stating I may be wasting my money by doing so. I no longer have the mortgage the endownment was taken out for - it has been repaid. Any advice would be appreciated.

dunstonh

It is still a Pearl policy and nothing to do with AMP. AMP demerged Pearl to HHG Ltd December 03 and HHG LTD announced last month that they are selling Pearl to a vulture capital, oops sorry, venture capital group.

Depending on the type of endowment it is and the time passed, it may be worth looking at surrender. However, some of the earlier ones are not that bad and may have retained benefits which would be lost on surrender. Later ones have no penalty to surrender after year 10.

I have just received this afternoon a research bulletin on Pearl, NPI and London Life (part of the same group) which stated "In railway vernacular, this marks the final chapter in these companies’ decline from mainline express trains to being sold for scrap.". My own research document which i have been issuing to Pearl policyholders says something similar.

In summary, Whether or not clients should stay in these funds remains one driven by individual considerations, the decision being a function of time to retirement, the presence of guarantees, lack of MVA guarantees, client’s attitude to risk, state of health (if any protection benefits involved) and so forth. WP clients with some years to go and no contractual incentive to stay put should, however, at least consider their options.

(MVA = market value reduction - penalty in other words)

You need to write to pearl asking the current value & surrender value and projection. Its worth assuming zero bonus on Pearl as a forecast of what is likely over the next 5-10 years. Then calculate if its worth carring it on or not