Why are no companies interested in my Endowment

EdInvestor

Many Phoenix policies have large guaranteed values, some caused by paying rather high bonuses in the past.Under new solvency rules brought in as a result of the Equitable Life fiasco, the money backing these guarantees must now be invested in safe bonds, not equities, and so almost the entire former RSA fund is invested in bonds.

But the result is that although the policies will pay out their guaranteed values, there will be no returns from equities to provide any extra, such as a terminal bonus, and the fund is closed to new business so there is no new money coming in either to help fund payouts.

Since most endowments sold in the 90s were based on the expectation that around half the maturity value would come from the terminal bonus, these policies are underperforming to the extent that they are now known as "zombie funds."

outbidder

Thanks EdInvestor, nice explanation.

sheffieldeagle

Will be surrendering my policy A.S.A.P. It seems that my policy is of no interest to the open market and now I understand why.

dunstonh

Phoenix endowments are being bought by some companies.

However sheffieldeagle, yours is not desirable because it has only been running since 1999. It's not old enough yet to be of interest.

outbidder

Is there a specific time period that policies become desirable or does it depend on more factors than just time?

outbidder

I have requested a quote for my policy so I'll post the results here.

mystic_trev

outbidder wrote: »

Mystic_trev, what makes you think it has become a bit of a dog, is it because it has gone from R&SA to Phoenix? I wouldn't have thought this would change anything. The premiums are the same, the maturity date is the same as are the benefits?

Maybe because I've got one - matures in November. Mines an old Royal policy, which I believe is slightly better than having a similar old Sun Alliance policy i.e. muturity values are slightly higher? Like all WP policies of the last few years, they haven't done very well. My pay out will be a bonus as I paid off my mortgage 10 years ago.From the latest projection it should pay out just under £30,000 on a Endowment to pay off £25,000 mortgage taken out in 1982............hopefully!!!!!!!!

outbidder

Well here's a quick update:

- Phoenix policy details submitted to APMM and nobody wanted it

- CIS policy details submitted to APMM and have had 3 offers so far


I guess Phoenix is a bigger dog than Digby and Clifford put together :-)

andymossy

without trying to fan the flames of this discussion, the easiest and safest way to find out is to contact the APMM members who are market makers and will be in the best position to decide whether the policy is worth buying. There are non members around who should be avoided because generally they have no funds to buy with and have to find a buyer first.