Legal and General Endowment, surrender or keep ?

silver_4444_uk

We have a L&G with profits endowment policy and would like to know what is the best option, surrender or keep ?

The last statement I got from them was 31/12/09


Start date 08/06/89
Maturity date 08/06/14
Basic sum assured £24405
Guaranteed life cover £79752
Existing bonuses £15292
2009 annual bonus rate
applied to sum assured 1.25%
2009 annual bonus rate
applied to existing
bonuses 1.25%
bonus added for 2009 £496.20
Total sum assured and
annual bonuses to 31/12/09 £40194.10
Current final bonus rate 58%

I phoned L&G for the surrender value of my policy today and they stated that it was worth £44,684.

We are in the fortunate position of not needing to rely on this policy for our mortgage (we changed it to a repayment) but we would be interested in hearing what other people would do with this policy.

Thanks,

Silver

paddedjohn

Keep hold of it, its only got 3 yrs left and it does include life cover

silver_4444_uk

Paddedjohn,

I know it has life cover, but I would be interested to know why I should keep hold of it or sell it .

Thanks.

silver_4444_uk

Further to my first post, I also forgot to say that we pay £115-80 per month into this endowment.

Incyder

well you need to add up what you will pay in monthly premiums for the last few years and then compare that with the final terminal bonus that only gets added when the policy matures.
That bonus fluctuates and you will only be able to get an estimate of it at the moment.
Its worth trying to get an estimate though, from L&G or an
independant financial advisor.

Don't cash it in until you have an estimate as you may be throwing big money away.

castle96

terminal bonus is only payable at maturity - yes what I alway thought. but from a recent L&G letter...."the surrender value is calculated using a % of the basic sum insured plus a % of the attaching bonus. You are also currently receiving a proportion of the current final bonus"

Never did get them to clarify this. Seems that the current SV DOES include TB

email [EMAIL="customer.response@landg.com"]customer.response@landg.com[/EMAIL]

silver_4444_uk

I contacted L&G today and they told me that:
Sum of my current total bonuses is £15789

Current final bonus rate is 58% of total bonuses,
which I reckon to be £9157-62. (This rate is variable and due to change again in Feb. )

The sum of my monthly premiums payable until 8/6/2014 is £4747 .

So on that information alone I thought I would be better off to keep it until maturity.

But after reading castle96 's post. I called them again and with regards to the statement mentioned by castle96 above :

"Am I currently receiving a proportion of the current final bonus in the surrender value ?" - I also couldn't get a straight answer from them.

Opinions anybody ???

castle96

I was in Insurance for 30 yrs and terminal always meant to me TERMINAL/END.
Email them - try to get clarification in writing

confused !

Incyder

Another thing to clarify;
If you ARE indeed getting a proportion of terminal bonus in the SV quote,
Is it an equal proportion based on the years it has already run, or is it still going to be loaded on by a greater proportion upon maturity ??

castle96

they won't say, "it's market sensitive" !

Incyder

I would be trying to keep it till maturity as its not long to go, unless you need the money now.
The chances are (I suspect), it will favour L&G if you surrender it early.