Endowment - surrender or keep?

kkgree1

I have had a Allied Dunbar (now Zurich) Adaptable Endowment plan for the last 11 years which I took out along with an interest only mortgage on a shared ownership property.

Fortunately I made enough profit to clear the interest only mortgage when we moved 10 days ago. This now leaves the endowment as purely a savings/life insurance/critical illness policy.

The endowment was for £32,500 with critical illness and life insurance for me. I understand it is a unit-linked managed fund. I pay a monthly premium of £58.27.

I've been in touch with Zurich today to be told it has a surrender value of just over £7000.

Our new repayment mortgage isin't large but my husband is the main breadwinner so it seems only sensible to take out separate life insurance for him. We're both in good health so life insurance shouldn't be more than £10-15 pcm each.

Do you think it is best to:
- Keep the endowment as savings/life insurance for me and take out additional life insurance for husband
- Surrender endowment and pay capital off new mortgage (with no penalty). Take out new life insurance for us both
- Stop paying premiums and use balance of endowment to pay for life insurance for me. Take out new life insurance for husband.

Any advice gratefully received.

dimbo61

Do you have joint LEVEL TERM life assurance on the new repayment mortgage ?
Do you have life assurance with your jobs?
Do you have kids?
Can either of you afford to carry on paying the mortgage IF the other dies?
You dont say how long the endowment has to last and if it has terminal bonsus
How has the endowment done over the last 11 years and is it still due to pay out £32500
You do have critical illness cover but how good is the cover?
Is there a family history of medical problems IE heart attacks,strokes,diabetic, ETC ?
DO YOU NEED THE MONEY ?
How much would joint life cover cost now you are older ?
So many questions most of which only you can answer !
Do you smoke drink and watch TV all day or go down the gym 5 times a week !
I think it would be cheaper to take out joint level term life assurance but I am no expert!
GOOD LUCK

kkgree1

We don't have joint level term life assurance on the new mortgage.
I have 60k life cover with my job. Husband has nothing. We don't have kids. We could both afford the mortgage if other one died. Lifestyle element of endowment covers major critical illness e.g. heart attack, strokes, etc. No family history of any such illnesses under 70.

Endowment has 14 years left to run. It's been running at amber alert for the last couple of years but this past year it seems to have done better because the shortfall is only £2600 at Zurich's projected long term growth of 6.75%.

Joint life cover seems fairly reasonable for us both at around £25 per month. We don't smoke, occasionally drink but don't exercise that much. We're both 32.

My gut instinct is telling me to surrender it and use the money to reduce the mortgage. The temptation though is to run with it for another 14 years and get it to close to 30k.

dunstonh

My gut instinct is telling me to surrender it and use the money to reduce the mortgage.

So, the endowment is tracking around 6.75% after tax and provision of life assurance. How much is your interest rate on the mortgage?

kkgree1

We're on a lifetime tracker with Britannia. 1.99% above base rate.
No early repayment or overpayment charges.

DVardysShadow

The policy is paying you 6.75% - [base rate +1.99%]. And it is giving you life insurance. looks good to keep to me.