Surrender Value more than sum assured

golden_girl

Hi

I was wondering if anyone could help me with the following;

We took out a policy for my daughter in 1989 with the Royal London as below

Started: 29.05.1989 Term of Assurance 20 years
Sum Assured: £2104.00 (plus Profits)
£8.66 a month.

This is an Industrial Branch policy and I do not received yearly bonus statements.

We requested a surrender value which was £2898.63. I've always thought the surrender value will always be less than the sum assured.

As she has just passed her driving test she has asked me to cancel the policy to put the proceeds towards a car. I know that a car would make a big difference when she travels home on leave but I am abit reluctant to cash this in.


Does anybody know why the surrender value will always be less than the sum assured. I wodner how much we would get if this plan goes full term..

Many Thanks for any replies

dunstonh

With these plans you have two levels of sum assured. The basic sum assured plus bonuses and the guaranteed sum assured in event of death.

Sometimes the two levels will be the same, other times different.

In your case, it sounds like its the sum assured plus bonuses. Future returns are likely to be very limited but you do need to find out the penalties as these could make it inefficient to surrender at this time.