cash in endowment or wait?

bouicca21

I have an endowment type mortgage. The endowment has 2.5 years to run - is there any advantage to allowing it to run its term rather than cashing it in now. (The proceeds are not needed to pay off the mortgage which will be redeemed on the sale of the house.)

holly_hobby

The advantage would be the life cover provided under the contract (which may be relevant to your family circumstances), and the possibility of a further terminal bonus at maturity (if a with profits plan).

Choice to maintain (if affordable) is yours alone I'm afraid.

Hope this helps

Holly

McKneff

Holly Hobby has posted exactly what I would have posted.

You could ring and ask them what kind of amount the terminal bonuses have been in the past few years.

bouicca21

Thanks - I can afford the premium and it is with profits. It would be nice to have the money now but not urgent/essential. Sounds as though I should be patient!

chachiluz

Hi
I am in a similar situation. I have a with profit plan that I started in 1988, not associated to a mortgage but just a way for saving a little money and having a life insurance. It finishes in 2016 and I am paying £20 a month. If I cash it now it will be worth 9,104.50 at maturity the table is at 4% 11,100 and at 8% 13,000. I doubt very much that it will gain as much. I have been given the possibility of having some of the cash as a loan 5% interest per year for the next 4 years and when plan matures they will keep the advance. I was calculating that if they give me the advance (6390) the interest over the 4 years will be around 1278, monthly payments into the plan for 4 years 960, making it 2,238 to pay them. So if I gain 11,100 minus 2,238 it is £8,873 which is less than the 9,100 they are offering me know. The only gain will be life insurance for 4 years. What do you think guys? Is it worth waiting? Or the companies that buy endowments are a better bet?
Gracias

holly_hobby

Unfortunately, there is no longer a traded endowment market - so unfortunately you don't have the propsect of a selling in the mix.

Hope this helps

Holly