endowment advice please

mrs_motivated

I have two endowment policies (both originally with Abbey Life, (then someone else and now royal london) anyhow i am thinking of either surrendering them or selling them.

Surrender value = £10,900

how do i sell them and is is likely to be worth it? am i likely to get much more and how lengthy is the process. Secondly the endowments are in joint names (myself and my ex husband - both were assigned to me as part of the divorce settlement) will they need to contact him for the sale, they dont if i surrender as the company as the legal paperwork assigning them to me?

Many thanks

orangina

Endowments are long term investments so its never "best advice" to terminate them early as the majority of charges are in the early years. But obviously its your perogative to make this decision.

If you wish to "sell" them look online, companies normally like the end of the term to be within 5 years from sale date and will ask if they are "With Profits" or Unit Linked". If this is the case you can compare the sell amount to the surrender value.

If you have the legal paperwork assigning them to you then they will not need to contact your ex but they will need evidence of this.

mrs_motivated

One is due to mature in 2012 and the other in 2018.

Neither are worth much and I pay a total of £52 per month into them, i dont need to sell them, but am desperately trying to become debt free and this would make a huge dent in the debts.

Dont really know what to do (keep changin my mind on this one)

orangina

what are the projected end values if you keep them? remember to take the most conservative amount and then compare how much you will pay in from now till then and how much you would potentially gain

Dont forget you have life cover in them too - which you may need to repace if you have dependants and given your increased age will be more expensive - if you dont need the life cover then I can understand it is a difficult decision - only you know your finances - weigh up the emotional benefit of reducing your debts quicker too - would this realease the £52 so you can pay off other debts quicker to?

opinions4u

orangina wrote: »

Endowments are long term investments so its never "best advice" to terminate them early

That is something of a sweeping statement.

dunstonh

opinions4u wrote: »

That is something of a sweeping statement.

Its the old tied agent sweeping statement. You often hear it from customers of tied agents or those from a tied agent background where they are told you should not cancel existing plans. The tied agents are often forbidden on recommending cancellation or at worst, didnt want to suffer a clawback on their commission and told people to keep them running.

IFAs dont have that restriction put on them and can recommend surrender or cancel where it is justified.

That said, it is right to be on guard as its not always easy to tell if and endowment is good or bad based only on the limited information provided. There are endowments that have had amber/red projections indicating shortfalls that have gone on to hit target.

orangina

Blimey - clawback on commission, I dont recall selling anything to this woman i have never met!

opinions4u

Its the old tied agent sweeping statement. You often hear it from customers of tied agents or those from a tied agent background where they are told you should not cancel existing plans.

Guilty as charged m'lud. I have dozens of Standard Life MC80 / unitised WP policyholders who I fed that line between 1988 and 1994. If it's any consolation, I believed it and bought my own policy too - execution only, so no compensation for me!

I can also recall my disclaimer line "although there is technically the possibility of the policy not repaying the mortgage in all likelihood you'll be changing your car or booking a holiday on maturity". Bad man .

dunstonh

opinions4u wrote: »

Guilty as charged m'lud. I have dozens of Standard Life MC80 / unitised WP policyholders who I fed that line between 1988 and 1994. If it's any consolation, I believed it and bought my own policy too - execution only, so no compensation for me!

I can also recall my disclaimer line "although there is technically the possibility of the policy not repaying the mortgage in all likelihood you'll be changing your car or booking a holiday on maturity". Bad man .

I did too during my tied agent days. No malice but you tend to believe what your employer tells you. Plus, they used to sack people who were caught recommending cancellations. Its only when you enter the IFA world that you realise half what the tied companies tell you is either BS or in their interests. Luckily, I didnt spend long enough as a tied agent to get brainwashed, like so many do.

Annisele

I wish there was a way to make tied agents spend a week with a decent IFA before they were allowed to make recommendations; I think it would open some eyes.

I know it would be horribly unworkable (I can't see many IFAs volunteering to babysit), and I have no idea how you'd check whether the IFAs were decent, but I still wish it could be done.

To the OP - we can't give you advice on these boards I'm afraid; only comment and discussion. It's very hard to say whether it would be better for you to keep your endowments or not; that depends on all sorts of things that we don't know about you.

If the policies are unit linked, it's very unlikely indeed that you'd be able to sell them. If they are with-profits, then you might get a little more by selling than by surrendering, but (in my opinion) you wouldn't get so much more that it would affect your choice of whether to keep the endowments or not.

mrs_motivated

thanks for the replys - i have asked for an up to date maturity projection etc. and info re with profits etc, hopefully that will help me decide.