Surrendering a policy

PabloNeruda

Hello
Could anybody give advice on surrendering a policy back to the insurance company?
I currently pay £28 per month into 2 policies (£10 and £18 monthly) for my daughter (now 12 years old) and have done so since her birth.

I am currently struggling financially with credit cards, mortgage, bills etc (I have recently done all the switching of car insurance, phone and utilities, home/contents etc etc thanks to great advice on this site) and have concluded that unfortunately I also now need to sacrifice this monthly outgoing to make ends meet, as I am also a single parent and also a full time university student.

She was due to recieve the money from the matured policies in June 2012.
I have today called the company (Liverpool Victoria) to ask for a surrender value, however I have also heard that there are companies that buy these kind of policies from you for a much better sum. Does anybody have any experience of this?

Kind Thanks.

Jake'sGran

No, I have never done that. I believe the general concensus is that if possible it is much better to make the policies "Paid Up". This way whatever has accrued to date will stay there and you can have it in June 2012. The only downside I can see is that these companies usually take a service fee each year. Surrendering a policy means that you will get a lot less than you have paid in so far. You could ask the company about any annual charges and if they can offer a projection of value, although this is unlikely as it is 8 years away. At least, if you do leave it as "Paid Up" you will not be paying ut the £28 each month. Also, in those years until 2012 the stock market could boom and your the value at the end may surprise you.

As far as I know Liverpool Victoria is a decent company - been around a long time.

margaretclare

Hi Pablo

Don't surrender the policies - make them 'paid up'. That way your daughters will still get the money you wanted them to get, at the end of the term, or when they reach 16. They won't get quite as much as if you carry on paying them, but you won't lose so much on them. I did this when I could no longer afford to go on paying for these policies for my 3 grandchildren. Just write to Liverpool Victoria and say you want to make the policies 'paid up'. It's quite a usual thing to do.

Best wishes

Margaret

PabloNeruda

Many thanks.

What about these companies that say they will buy the policy from you?

Paid-Up sounds like my preferred option over surrendering, but ideally I'd like to see what the mos amount is that I could potentially get right now.

Jake'sGran

PabloNeruda wrote:

Many thanks.

What about these companies that say they will buy the policy from you?

Paid-Up sounds like my preferred option over surrendering, but ideally I'd like to see what the mos amount is that I could potentially get right now.

They have to make commission when they come to offer them to potential buyers so are unlikely to offer you much. Go for "Paid Up". No one here can give you an answer to your last question, only Liverpool Victoria.

EdInvestor

I'd have to disagree with this advice. These policies are endowments, I assume?You may well be able to sell them.Try this site:

https://www.apmm.org.

Otherwise, surrendering them and putting the money in an ISA or other account will usually be preferable these days.Making policies paid up was a reasonable idea some years ago, but these days it isn't.It increases the charges which eat away at the returns which are already much lower than they used to be and the guaranteed value is slashed.

Just in case, post some info on the policies so we can have a proper look:

Guaranteed sum assured
Declared bonuses
Surrender value
Maturity date
Maturity projections

dunstonh

What about these companies that say they will buy the policy from you?

They will buy mortgage endowments but wont be interested in savings endowments. They are set up differently to mortage endowments and the shorter term makes them less attractive as well.