Endowment- what would you do

stevenatleven

Hello

Would like to run my endowment situation past members

My wife has an old endowment which is due to mature in 1 years time.
Today it is worth £13707 which she can take with no penalties.
on top of that my wife would,nt have to pay a further £289.56 in premiums.
So about £14000 in real terms that i could put in our joint ISA allocation and get 3.5% tax free.
That would be £11280 and we would get £394 from that.
the remaining £2427 could be put in a high(sic)interest account say 2.5% after tax would make around £48.
So if you have,nt lost interest the endowment would have to make approx £14438(annual bonus is usually about £100)
In the current climate with todays FTSE closing at 5266 ish I just can,t see the FTSE breaking 6000 with all this Euro crisis stuff on the go.And if it really goes south then the endowment might be less than todays figure.Guaranteed figure is £12146
So my question is what would you do ?

bigadaj

If you can name the firm you might get someone who has recent experience, endowments are supposed to pay out a terminal bonus but no guarantee, have you asked them what the final projection might be.

Endowments are supposed to provide smoothing, so in theory the current drop in markets should have limited effect, however the insurers now don't seem to have the reserves in these policies, so it could be an adverse impact.

McKneff

Dont forget, while the policy is running, life insurance is in place too.

opinions4u

Who is the life assurance company?

What type of policy is it?

What is your mortgage rate?

What penalties are there for paying it to your mortgage now?

stevenatleven

Thanks for all the questions,thought provoking and exactly the kind of stuff i expected.I should have provided more details.

The company is Clerical Medical. It is a with profits policy

It is an old policy for a house we have long since sold and we don,t
have a mortgage on our present house,we let it run as an investment.

The person at Clerical Medical I spoke to couldn't give a final value.
They said it is linked to the stock market and couldn't speculate.

The life insurance side isnt really relevent as we both have savings/pensions etc

stevenatleven

Nobody got anything to say about Clerical Medical endowments ???

POPPYOSCAR

How can it go south and be worth less if its a 'with profits' policy?
Once profits are added they can not be taken away!

My Endowment is with Friends and matures next month. I knew it would be no where near the projected value but I have been pleasantly surprised to be receiving a £5000 terminal bonus.

POPPYOSCAR

Just a point to consider.

Make sure that the policy is still not assigned to the original lender, if it is payment will be made to them. They are supposed to inform the insurance company when they no longer have an interest but ours did not.

If it is still assigned to them you will have to get a letter from them stating that they no longer have an interest.

stevenatleven

Poppyoscar thanks for the comments
I did,nt mean it would all be lost I meant we might only get the guaranteed
figure of £12146 if the stock market really takes a tumble and no bonus would be payable.

I will check the original lender thing out as well,thanks

POPPYOSCAR

stevenatleven wrote: »

Poppyoscar thanks for the comments
I did,nt mean it would all be lost I meant we might only get the guaranteed
figure of £12146 if the stock market really takes a tumble and no bonus would be payable.

I will check the original lender thing out as well,thanks

I am no expert but I do not think it quite works like that.

Although the final bonus is not guaranteed I think they try to hold back something so they can pay out a final bonus of some sorts.

I obviously do not have a crystal ball but as I said I have just got my pay out figure which I will get next month, and despite the difficult economic climate they have added £5000 to it.