Endowment Policy matures Nov 2011 - change to Fixed Interest Deposit Fund?

Lillie_Munchkin

Hi everyone

I've looked around and could only find a post for 2008, so thought I would pick your brains again.

I have an Adaptable Endowment Plan which will mature 1 Nov 2011. The company (Zurich) are saying 'The periodic review, which ensures contributions are sufficient to support the benefits selected, has just taken place and we are pleased to confirm that your present level of contributions will continue to provide these benefits'. In other words, my plan is on track to pay out £13,500. We have already repaid our mortgage so do not NEED the money to pay debts, however, I am extremely concerned that in the last year of this plan, despite being 'on track' for as long as I can remember, it may suddenly become worth less. Surely, the whole point of letting you know you are on track is because ........ YOU ARE ON TRACK!

Now they are asking me if 'to avoid the risk of your plan experiencing a fall in its value, you may like to consider switching the value of your Plan, and your future Contributions, into a Fixed Interest Deposit Fund'. I understand short term volatility but ........ Is this scare mongering? Are they offering me something that is a good deal for them and not necessarily for me? How do I KNOW whether this is a prudent thing to do?

All contributions gratefully received.

Lynne

dunstonh

I understand short term volatility but ........ Is this scare mongering?

No its common sense risk reduction. It should happen on most investments as you get closer to your withdrawal point. Its most commonly seen on pensions. However, many contracts require you to do it yourself or use an IFA to do it. Some build it in automatically. In your case, its up to you.

Are they offering me something that is a good deal for them and not necessarily for me?

it makes no difference to them.

How do I KNOW whether this is a prudent thing to do?

You wont know if it was the right thing or not until 1st November 2011. However, the prudent thing is to switch. You have hit your goal. Job done. Why keep risking it for the next 12 months?

sheslookinhot

dunstonh wrote: »

However, the prudent thing is to switch. You have hit your goal. Job done. Why keep risking it for the next 12 months?

Does the OP give up the opportunity of a teminal bonus if the endowment is given up ?

dunstonh

sheslookinhot wrote: »

Does the OP give up the opportunity of a teminal bonus if the endowment is given up ?

Its unit linked with this one so terminal bonus doesnt apply.

Its funny how things change. 20 years ago, the with profits endowment looked down on the unit linked endowment. Nowadays, unit linked are considered better as you are more directly invested and will get returns closer to the returns of the underlying assets.

Lillie_Munchkin

Hi everyone

I've checked with Zurich and the policy is now worth £16,648.45 so I'm taking a chance, and NOT moving over to the Fixed Interest Deposit Fund. I may live to regret it, but in any case, I'll let you all know November 2011

Lynne

Dick_here

dunstonh wrote: »

You wont know if it was the right thing or not until 1st November 2011. However, the prudent thing is to switch. You have hit your goal. Job done. Why keep risking it for the next 12 months?

I hope the OP (re- ?) reads this and pays attention. If the company had written to you saying they were moving your money into a safer place for the next year, would you say "no thanks, leave it where it could potentially reduce significantly", I doubt it. Yet you're choosing to do just that :exclamati

Thrugelmir

Lillie_Munchkin wrote: »

Hi everyone

I've checked with Zurich and the policy is now worth £16,648.45 so I'm taking a chance, and NOT moving over to the Fixed Interest Deposit Fund. I may live to regret it, but in any case, I'll let you all know November 2011

Lynne

Depending on the underlying investments. A fixed interest fund will still have capital movement. As the value of the securities moves up and down. To be certain of the outcome you'd need to consider a cash fund.

TrickyDicky101

Is it definitely a non-profit unitised endowment and not a unitised with profit endowment? I get confused between my with profits/non profts terminology, but if it is unitised with profits then it is possible it will include an element of terminal bonus on reversion. Do Zurich offer unitised with profits?