Which way to turn

independance

We have an Aviva Endowment Mortgage with 9 years left to run. We pay £530.40 per year over 25 years. Today we got a sort of statement 3 pages.

We have paid our Mortgage off but cant decide whether to surrender the policy in for £7525.10 or let it run it,s course.

Details as follows.

Homemaker perticipating in CULIS New Series(inc Brit Merc) bonuses

Sum Assured £6456 Bonuses previously declared £2346.84 New Bonus £313.37 Total Bonus £2660.21 this does not include any final bonus.
We have in the past had a shortfall notice but because the Mortgage had been paid off we were not to concerned.
But I do not want to throw good money after bad.

Any thoughts.:(

Thrugelmir

You have a third option of making the policy paid up.

This will enable you to receive further annual bonuses plus the terminal bonus. The terminal bonus tends to be a significant proportion of the value of the policy.

By making the policy paid up no further premiums are payable. So the final pay out will be lower however may prove a useful lump sum in a few years time.

independance

Thank you for your reply very helpful as I did not realise you could make it paid up. One more thing, what would happen to the Life Insurance?

Thrugelmir

In the event of death you would receive the paid up value of the policy plus the accrued bonuses to date together with the terminal bonus applicable at that time.

So you would lose the life assurance cover afforded by the policy if you continued to make premium payments.