Open-ended life assurance: time to stop paying?

ephiesmum

21 years ago, when we were about to start a family, we bought a joint life policy from Scottish Mutual, now Phoenix. For c.£26 a month, we would be paid c.£50,000 on death, though this amount was subject to review after 10years. Well, the pay-out has indeed gone down, and now stands at c.£13,000 (free of inheritance tax, I think), with a warning that it will continue to go down every few years! Still, if one of us died tomorrow, that would still mean we'd paid in just over £6000 and would get double that amount... so is this worth continuing with as a sort of 'nest-egg' for our kids for a bit longer, or should we get out now? I have no idea how to work out what sort of interest rate this has been equivalent to, though obviously its going to get worse and worse as time goes by. The cash-in value is £490. As I'm writing this out, it seems to become clearer that the policy has passed the point where it was worth it (if it ever was), but I'd still like to know if I'd be throwing good money after bad... Thanks.

dunstonh

so is this worth continuing with as a sort of 'nest-egg' for our kids for a bit longer, or should we get out now?

You need an analysis of your current needs and compare that to current products/pricing to see if it still fits and is suitable. Probably isnt (it isnt in most cases - but can be in some).

The cash-in value is £490. As I'm writing this out, it seems to become clearer that the policy has passed the point where it was worth it (if it ever was),

It was probably worth it for the first 10-15 years. Basically up to the first review point where the cost benefit ratio was better.