2 Endowments, Keep or Sell

moneysaver

Hi,
I have 2 endowments & wonder should I keep sell or surrender them?

1st policy with Pheonix Life(formally Royal Life) 25yr With profits endowment

Target Amount £25,000
Basic sum assured £8,250
Bonus to date £2163.32
Surrender value Nov 2006 £5701.00
Monthly Premium £37.00
Maturity date 02 Aug 2018
Maturity Projections 3.75% £13,200 (-£11,800)
4.5% £14,100(- £10,900)
5.25% £15,200(-£9,800)

2nd Policy Friends Provident 25yr With profits endowment.

Target Amount £16,000
Basic sum assured £5552.00
Bonus to date £2668.10
Surrender Value Nov 2005 £5511.54
Monthly premium £21.96
Maturity date 31 Dec 2013
Maturity projections 4% £8650(-£7,350)
5.5% £9680 (-£6,320)
8% £11,600( -£4,400)

Could anyone give me some advice as what to do with these policys please.

Thanks
Moneysaver

Finishrich

Another option might be worth finding out what they could be worth it you make them "paid up" - Keep them running the full term but don't pay anymore money into them.

dunstonh

Investigating the paid up option should always take place. Many endowments have surrender penalties only up to a certain point in the policy life. i.e. year 10 or 15. If you suffer a £3000 penalty in year 8 but no penalty in year 10, then holding out to that point before surrendering makes financial sense. It all comes down to balancing what you are going to lose against what you are going to make on the alternatives.

EdInvestor

moneysaver wrote:

Hi,
I have 2 endowments & wonder should I keep sell or surrender them?

1st policy with Pheonix Life(formally Royal Life) 25yr With profits endowment
Maturity Projections 3.75% £13,200 (-£11,800)
4.5% £14,100(- £10,900)
5.25% £15,200(-£9,800)

If you cashed in this policy and placed the money on deposit@ 4% also paying in the premiums to maturity, you should up with 15,943.

If you used to the money to pay off a mortgage with a 5% interest rate, you would get a return of 17,495 by the end.

Boith these figures are higher than what you will get from your Phoenix policy which is now invsted in a zombie fund So I would surrender it pronto.Replace the life cover first if you need to.

Please update the surrender value of the FP endowment for a view.

moneysaver

Thanks for the reply's
These policies are not attached to any mortgage at this time but were in the past. I will try & get a surrender value for the FP policy & post asap.


Moneysaver

moneysaver

Just spoke to FP the surrender value today is £6202.00.


Thanks
Moneysaver

EdInvestor

moneysaver wrote:

Maturity projections
4% £8650(-£7,350)
5.5% £9680 (-£6,320)
8% £11,600( -£4,400)

With the FP policy oif you surrendered an placed the money on deposit @4% also paying in the premiums to maturiyt you should end up with 10,291.If you used the money to pay off the mortgage the return would be 10,934.

There's no real prospect o the FP fund making more than 5% annualised return as it has a large chunk invested in bonds.

So I think you'd do better to surrender, replacing the life cover first if you need to do so.

Supernova

EdInvestor wrote:

There's no real prospect o the FP fund making more than 5% annualised return as it has a large chunk invested in bonds.

Latest figures on FPs website are 44% equities, 9% property, 47% Fixed interest and other.

Is that the sort of mix you are referring to?

moneysaver

Supernova wrote:

Latest figures on FPs website are 44% equities, 9% property, 47% Fixed interest and other.

Is that the sort of mix you are referring to?

Just waiting on the reply from this post. I will then make up my mind on
wether to surrender both policies.


Thanks
Moneysaver

thomasperfecto

You could of course SELL the policies.
Check out apmm.org