How Do I Sell an Endowment Policy?

dunstonh

Anyone know whether I stand any chance of finding anyone else who will buy it, or whether continuing to pay it or surrendering it are my only two options?

No-one will buy it as there is no retained value in there which would interest a buyer. Your plan has a daily value.

Your options are:
1 - keep it going as it is
2 - keep it going but alter the fund spread to something better
3 - make it paid up
4 - surrender

Without knowing anything about the policy, we cant give any more detail.

alextegg

Thanks a lot, can you tell me what 'make it paid up' means?

It's an ex scottish amicable, now Prudential policy, started in 2/95, running for nearly 12 years, maturing in 2/2020. target 55k, currently predicted 38k

What else can I tell you?

Alex

dunstonh

Thanks a lot, can you tell me what 'make it paid up' means?

Its when you cease premiums but leave the money invested. Useful for when you have a reducing surrender penatly in the near future.

96% of Scot Am policies are hitting target. You have to disregard the given projections to some extent and look at the real performance and use an appropriate projection for that. There are no guarantees but its probably not as bad as you think.

alextegg

Hmm, but given I have an offset mortgage of circa 200k, I'm assuming I must be better off to get the 11k now and pay it off that, rather than continue with my £80 per month payments and wait another 14 years for my 38k (plus) ?

Thanks

Alex

dunstonh

Hmm, but given I have an offset mortgage of circa 200k, I'm assuming I must be better off to get the 11k now and pay it off that, rather than continue with my £80 per month payments and wait another 14 years for my 38k (plus) ?

Maybe, maybe not. Im up 11% on my investments since August. I pay around 5.8% a year on the mortgage. The investments are beating the mortgage so I stick with the investments.

Its a case of balancing investment risk/return. If you have the risk profile, you can potentially make a lot of money by sticking with investing. If you dont have the risk profile, you should be looking to pay the mortgage off.

You dont say which Scot Am managed fund it is as they have a range of funds (a couple are very good). The bog standard managed (which isnt that good but can be switched out of) has managed 8.24% growth in the 12 months to Oct 06. The previous years were 18.19%, 9.71% and 11.49%.

Only three of the last 10 years on that fund would have been better paying off the mortgage.

This is an area that you cant say which option is best. Only hindsight will tell which was best. So, its a personal judgement call based on your risk tolerance.

EdInvestor

What interest rate are you paying on your mortgage?

alextegg

First direct standard offset mortgage, was 5.75, just gone up to 6%

bernice_2

i am in turmoil!!!!!! i have 2 endowments and they both have a shortfall i dont know whether to cut my losses and sell or keep them going
My first one matures in 2014 with 10,000 shortfall the policy was for 42,000 and the surrender value is 18,900
tne other is 19,750 with a shortfall of 2,000 matures in 2025 ive got a part and part mortgage and i dont know whether to changem the mortgage to repayment only(£109,700) and pay off the proceeds to the mortgage or invest until 2014. Any advice gratefully recieved

alextegg

First thing before you decide whether to keep them, surrender them or sell them is have you tried to claim compensation?

If not use the many excellent sources on this site, I used the link to the letter generator which generated me the text for the letters to send off, I did and got compensation. You might get a payout on both of your endowments? No guarantees, but you should try for the cost of 2 stamps!

Once you've got compensation, or been told you can't have any then use an IFA to advise you whether to keep, modify, surrender or sell, or some of the excellent free (but with health warning) advice on this forum?

That's my suggestions, anyway!

Alex

EdInvestor

alextegg wrote:

What else can I tell you?

Hi Alex,

Some maturity projections would be nice

So far I've got

Provider: scot Amic/Pru
Surrender value 11351
Remaining term c.13 years
Monthly premium 80 quid
Mortgage interest rate 6%

I assume it's a unitised WP policy?