Cashing in a Standard Life Endowmnet with only 2 years to go.

bigmondy

25 Year policy with only 23 Months left - but I need the money now.

I have stopped paying the monthly installment last month and wondered if I will lose a lot by cashing it in early.

I have paid an early maturity option at the start for a number of years so there will be no early charges.

But today I was told there is a final bonus of around 11% being added to policies and I am totally confused.

Help!

dunstonh

wondered if I will lose a lot by cashing it in early.

Possibly. Indeed, the damage may already be done.

You need to look at the current position and the surrender value and how much the Mortgage Endowment Promise (MEP) is. The MEP is lost if you case premiums or surrender. I have seen Std Life MEPs in the £10,000 range. So, with under 2 years to go, it could be very expensive. It may not be too late to reinstate. There is normally a period of a few months where you can reinstate without health declaration.

bigmondy

thanks dunstonh - that is helpful. It is a small policy currently worth around £15k and I was told the MEP is around 11%.

The original endowment target was £28k.

Dick_here

Ask SL for the current surrender value and the current maturity value of a similar policy.

dunstonh

I was told the MEP is around 11%.

the MEP is normally expressed as a range. ie. £1200-£3000 (to reflect the three different projection rates used on example projections). I believe when you say 11% you are referring to the current final bonuses being applied on some maturities.

Ask Std Life what the MEP value is.

kingstreet

I'd ask them about the non-forfeiture regulations too. If you stop paying, they may take the cost of the life cover out of the investment value. Don't leave the plan in limbo.

Pay it, surrender it or make it paid-up as soon as you can work out what's best. You say you need the money? Do Standard still do policy loans?

bigmondy

Have just been told that if I cash today I will get £16,180.

I pay £36/month and have £792 still to pay.

If it was surrendered today and was 25 years would get £18,391 today.

Jeebus - I dont know what to do!

bigmondy

Kingstreet - good advice - just phoned and paid! Sadly they no longer do the loans. Thats my premiums up to date now - only missed by a few days.

dunstonh

Did they give the MEP value? That is not included on those figures.


The current cost of surrender is £2211 plus MEP. You have £792 to pay. So, the cost of surrendering early, ignoring any future growth is £1419 plus MEP value.

bigmondy

Yes sorry - they included the MEP in that - the range they are giving out on my policy is between £800 and £1,200. I assumed the £18,391 she quoted on the policy if it was maturing today included the MEP - I cannot remember now - but I am sure it did.

PS: dont need the life cover and it isnt attached to a mortgage.

PPS: you guys are great.

bigmondy

Forgot to say - it was supposed to be covering a morgage of £28k.

I would have been screwed if I had kept that one going.