Should I cash in my Endowment Assurance Policy

MummyB

I have an Endowment Assurance(Unit Linked)policy with AXA that has 20months left before it reaches 25yrs. I have been told that I will recieve a guaranteed £14606.12, but could surrender it now for £20700.36. I have been told that policies make the most money in the final year, so is it unwise to cash it in? Is it possible that the value will not be much more, or even less?

dunstonh

I have been told that policies make the most money in the final year

That is not correct.

Is it possible that the value will not be much more, or even less?

It could be the same, less or more. No-one can tell.

What is the current value? You give the surrender value but we need to know it in context to the actual value

MummyB

Hi
Sorry, my mistake. £20700.36 is the current value. I pay £42 per month.
Thank you

dunstonh

If the current value and the surrender value is the same and you have no need for life assurance and are not on means tested benefits, then you could well find better options.

If the surrender value is lower, then you have to look at the cost of surrender.

holly_hobby

You need to be aware, if it is with profits policy, that in surrending the policy early you will lose out on any terminal bonus that MAY be added the policy at maturity.

TBs are not guaranteed and vary between providers, but just another consideration you should make before you bail out.

I am not sure if you have considered this, but you may be able to sell your endowment (whereby you may get more than the current surrender value).

Have a google on this, and maybe get a couple of quotes on what you may realise from its sale - the pch price normally is infuenced by who the provider is, term of the contract, prem paid, how long to maturity, current emvs and other bits and bods.

Hope this helps

Holly

opinions4u

holly_hobby wrote: »

You need to be aware, if it is with profits policy, that in surrending the policy early you will lose out on any terminal bonus that MAY be added the policy at maturity.

TBs are not guaranteed and vary between providers, but just another consideration you should make before you bail out.

I am not sure if you have considered this, but you may be able to sell your endowment (whereby you may get more than the current surrender value).

Have a google on this, and maybe get a couple of quotes on what you may realise from its sale - the pch price normally is infuenced by who the provider is, term of the contract, prem paid, how long to maturity, current emvs and other bits and bods.

Hope this helps

Holly

It's a unit linked policy, Holly.

I have an Endowment Assurance(Unit Linked)policy with AXA

holly_hobby

Ah .... ignore all of my post then !!!! (less haste more speed as they say !!)

Thanks to Ops !

Holly

hcb42

opinions4u wrote: »

It's a unit linked policy, Holly.

I am glad you pointed that out. You see it a lot on here, when many policies are in fact unit linked - I was starting to think I was going mad, as I cashed mine in years ago

opinions4u

holly_hobby wrote: »

Ah .... ignore all of my post then !!!! (less haste more speed as they say !!)

Thanks to Ops !

Holly

No worries. I've made a similar mistake more than once on here!

MummyB

dunstonh wrote: »

If the current value and the surrender value is the same and you have no need for life assurance and are not on means tested benefits, then you could well find better options.

Thank you for your help and I am sorry to be so dim.

My policy summary statement says:

Maturity date: 08/02/2013

Gross surrender value: £20700.36

Fund value: £14606.12

Death benefit: £21108.31

I do not need life assurance.I recieve Family tax credits and working tax credits as a single working parent.

I could do with the money but not at the risk of losing out for the sake of 20 months.

What does Unit Linked mean?

MummyB

MummyB wrote: »

dunstonh wrote: »

If the current value and the surrender value is the same and you have no need for life assurance and are not on means tested benefits, then you could well find better options.

Thank you for your help and I am sorry to be so dim.

My policy summary statement says:

Maturity date: 08/02/2013

Gross surrender value: £20700.36

Fund value: £14606.12

Death benefit: £21108.31

I do not need life assurance.I recieve Family tax credits and working tax credits as a single working parent.

I could do with the money but not at the risk of losing out for the sake of 20 months.

What does Unit Linked mean?

Sorry, meant to also ask what the better options would be.