Legal and General Endowment, surrender or keep ?

silver_4444_uk

Well I have decided to surrender the policy and take the the cash.
At least we then have control over it.

Thank-you all for your replies to my question.

Rgds.

Silver

paulsmith109

silver_4444_uk wrote: »

Well I have decided to surrender the policy and take the the cash.
At least we then have control over it.

Thank-you all for your replies to my question.

Rgds.

Silver

Sorry to `thread hijack` so to speak. I `m in a similar position but with a policy that has almost finished:
25 year conventional life with profits endowment policy with L&G:
Life insurance value £48000
Maturity date: 1 Nov 2011
Premiums £78.80 per month, so approx £709 left to pay in premiums,
As of 31 Dec 2009:
Basic sum assured £17664
Existing bonuses £15826
Total of the above £33490
Final bonus rate 68% of attached bonuses.

Surrender value as of today £44323
Estimated maturity values:
4% £44700
6% £45200
8% £47100

Final bonus rate to be reviewed on 17 Feb 2011. As this is quite soon I will wait and hopefully see this increase after two goodish years for the FTSE 100. Otherwise it is tempting to cash in now and pay off a huge chunk of mortgage interest.
If final bonus rate increases to say 80% I would get approx £46500. if 90% I would get approx £47700.
What should I do? Does waiting another month sound sensible?

castle96

while my surrender value quote seems to include the full terminal bonus of 58% of accrued bonuses.....

L&G letter.. " what you'll get back when your policy matures is the basic sum insured of £11938, the bonuses we add each year, which currently stand at £7218, plus any interin and terminal bonus payable.
The projection (ie the 4/6/8%....) is not split between these elements. It's just a projection of the total benefits that you may receive at maturity. The projection calculation method doesn't distinguish between the basic benefit purchased by the premiums, the annual bonus and the final bonus"

All clear so far then...!?

"The surrender value is calculated using a % of the basic sum insured, together with attachng bonuses at the time. You are also currenly receiving a proportion of the current final bonus. These proportions change in line with market conditions,it is not Company policy to disclose the proportions used, as this is market sensitive"


My current surrender value seems to include terminal bonus of the full 58% of already attached bonus.

I shall be keeping mine (2 yrs to go), as the surrender value is rising and 'pundits' seem to be indicating that investment returns are rising. I shall keep my fingers X'd !

bigsteve

I may be mistaken, but i believe the terminal bonus is calculated thus:

Existing bonuses (Say as in OP) = £15292 plus
bonus added for 2009 (Say as in OP) = £ 496.20 = 15,788.20 multiplied by
Current final bonus rate (Say as in OP) = 58% = £ 9,157.15

This is added to Total Basic Sum Assured plus bonuses to date : 24405 15788.20 + 9157.15 = 49350.35 ... but surrendering before maturity will inevitably incur some sort of deduction (MVA).