With Profits Vs Unit Linked

chelloQ

If anyone can help me I would appreciate any input/advice. I am considering selling either one or both of my endowment policies as both are showing a shortfall and opting for a repayment mortgage. Can anyone tell me which one would be the most desirable to keep or to sell. Policy details are as follows:

Loan Amount: £40k

Policy 1
Company: Standard Life
Start/Finish: 8/5/1987 – 8/5/2012
Type: With Profits
Annual bonuses to date: £7,507.66
Monthly premium payment: £35.20
Basic sun assured: £9,263
Guaranteed death benefit: £28,500
Surrender value: £14.613

Policy 2
Company: Countrywide Assured
Start/Finish: 26/6/1997 – 26/6/2012
Type: Unit Linked
Annual bonuses to date: N/A
Monthly premium payment: £46.65
Basic sun assured: £11,500
Guaranteed death benefit: £11,500
Surrender value: £5.683

EdInvestor

Please post the maturity projections for the two policies and also the interest rate you are paying on your mortgage.

Mr_helpful

A unit linked policy doesnt have a sale value really as the value of the units are what you get and fluctuate daily
A traditional with profits May have a value higher than the surrender value if sold but it depends on demand for that policy and which company its with.

chelloQ

Thanks guys for your replys. The projected maturity values and current interest rate you require are as follows;

Policy 1: Standard Life (figures as of March 2006)
Growth/year 3.75% 5.50% 7.25% Target amount
£17,700 £19,500 £21,500 £28,500


Policy 2: Countrywide Assured (figures as of September 2006)
Growth/year 4.0% 6.0% 8.0% Target amount
£9,250 £10,100 £11,100 £11,500

I am currently on a tracker product with the Halifax at a rate of 1.490% above BOE base rate, which is at 6.740%. I hope this helps you in answering my questions, thanks

EdInvestor

chelloQ wrote:

Thanks guys for your replys. The projected maturity values and current interest rate you require are as follows;

Policy 1: Standard Life (figures as of March 2006)
Growth/year 3.75% 5.50% 7.25% Target amount
£17,700 £19,500 £21,500 £28,500

If you cashed this one in and used the lump sum to reduce the mortgage also boosting the monethly mortgage payment by the endowment premium, your total return at maturity would be 22,737 which is considerably better than SL's top forecast, so i would dump this one.

Policy 2: Countrywide Assured (figures as of September 2006)
Growth/year 4.0% 6.0% 8.0% Target amount
£9,250 £10,100 £11,100 £11,500

If you proceeded similarly with this one your maturity amount would be 11,218, again better than forecast, so this one is a likely candidate for the chop as well.

chelloQ

Thanks for your advice EdInvestor you help as always has been much appreciated.