Legal and General Endowment, surrender or keep ?

silver_4444_uk

Incyder, castle96 and paddedjohn,

Thank-you for your advice !

I will email L&G to see if I can get any further clarification on
" If there is a proportion of terminal bonus in the surrender value quote ?"
and if there is a reply I will post it on this site.

Until I hear anything different from L&G, I think I will keep hold of the endowment policy due to the numbers I calculated earlier, in the post.

Thankfully we don't need the money in the short term.

Thanks.
Silver

castle96

just received call from L&G. My pol same as yours, started 89, matures 2014...so in round figures.
"current surr val is £20637

G'teed sum !!!'d £11000
accrued bonuses £7000
terminal bonus £4000" this (TB) figure is 58% of accrued bonuses and IS included in Surr value"

"the minimum figure you would get at maturity, if no more annual or terminal bonuese were added, is £19156"

"6% seems a good guide for the future growth " - don't know how someone could state that. But I am fairly confidant (pressed her again and again, and for her name), that the current rate of TB, ie 58% of current accred bonuses, IS included in SV. Now let's see in 2/3 yrs time, if there IS, ANY TB !!

silver_4444_uk

I phoned L&G again today and they did confirm that the terminal bonus is included in the surrender value quote.

My figures were as follows:

Surrender value (12/1/11) £44684-60
Basic sum assured £24405
Guaranteed bonus £15789-10

Illustrated maturity values at 4%pa £55300
....................................... 6%pa £58600
....................................... 8%pa £62600

The terminal bonus at maturity (whatever that may be at the time).
will be added to the values above.

Noselfdiscipline

If those are illustrated maturity values, then they include the terminal bonus already.

Terminal bonus is included in surrender values too - a proportion of whatever rate it currently is. Pro rata'd in some way, obviously you dont get the full whack as your policy hasnt run all the way.

With regard to your remaining premiums, these are already accounted for in the basic sum assured.

castle96

confirmed
"the IMV's DO include TB"

silver_4444_uk

Thanks for that information.

When I spoke to L&G yesterday, I was told that if there was a terminal bonus it would be paid in addition to the maturity value and I did ask the gentleman to confirm this which he did !!!?

More fool me, I believed him or maybe it was my wishful thinking of hopefully decreasing the shortfall !

I am seriously thinking of surrendering the policy and walking away. At least then it is under our control what happens to our money.

From the figures I have posted, do you think it is still woth keeping to maturity ???

silver_4444_uk

Everyone,

I would really value your opinion as to whether it makes sense to surrender or keep this policy, from the updated figures I have posted.

Thanks,

Silver

Noselfdiscipline

silver_4444_uk wrote: »

Everyone,

I would really value your opinion as to whether it makes sense to surrender or keep this policy, from the updated figures I have posted.

Thanks,

Silver

Well, do you want £44,000 now, or potentially fiftysomething in three years?

Incyder

hello again
well have we all got to the bottom of the terminal bonus thing ???

i.e if you cash it in now 22 years into a 25 year term are you going to get 22/25ths of the bonus
or is it biasedly loaded on at the maturity date ?
Has that been cleared up?

I realise there is a proportion TB in the SV but is it an equal amount per year served ? Or is it not ?

SmileyG_2

Hi all,

the endowment policy described here is similar to mine with L & G
i.e. 6% target value £35500 (Aug 2014) , current value £26950. I make it a policy of getting a surrender value every three months. Once it gets to £30,000, it'll be enough to pay off a sizeable chunk of the mortgage; then I'll cash it in!

It's a tricky situation. I'm keeping mine, primarily for the life cover on trhe outstanding mortgage and in the hope that they can eke out 6% pa (not managed it to date!). Like everyone else I would never take out another endowment, prefering to plough my own furrow, with a mixture of shares, investment trusts and cash ISAs. The latter approach has helped me build up an investment fund to cover the shortfall.

If you don't need the life cover, look at the 4% figure and decide if you'll be happy with that on maturity. If not, cash it in and do your own thing.

SmileyG

PS: The surrender value does include a proportion of the terminal bonus (what proportion, well who knows!). To get the full terminal bonus you will need to hold to maturity