Surrendering an endowment policy...

Jupiter74

Hi folkes,

I'm thinking about surrendering an endowment policy. It's with Phoenix Resolution Group and its performing terribly. I don't think it's suitable for selling as it is unit linked. I've been paying in about 15 years and have 10 years to go. I guess it's value is related to the stock market so think I might as well cut my loses and get out while it's a bit higher than it's been for a while. I'm wondering how you go about it, how long it takes to go through, do I have to tell Coventry Building Society who I have the interest only mortgage with?

Thanks in advance

Mark

kingstreet

The performance depends on what your money is invested in. An equity fund will be invested in stocks and shares. A property fund in commercial property. A fixed interest fund in gilts and corporate bonds.

You may be invested in a managed fund which combines a bit of three or four of the other funds - possibly equities, gilts and property.

You still have a long time left, so no-one can advise you if it's better to continue or to cut your losses. However, remember there is life cover included as a minimum, so you'll need new cover if you do decide to surrender.

Your questions;-

Selling? - no, there's no market for unit linked policies as you suggest
How? - contact the provider which will send you the appropriate discharge forms and other requirements
Timescale? - difficult to say.
Coventry? - if the policy is assigned to Coventry, you'll need Coventry's permission to surrender and possibly a re-assignment of the policy if it is being formally used as collateral for the mortgage. The insurer will tell you this and the re-assignment may be one of the requirements mentioned.

Finally, don't forget if you do surrender you then have no repayment plan to repay the mortgage. You need another one, or a conversion to repayment.

Jupiter74

Thanks Kingstreet. Very useful, concise information.