Quick Scottish Amicable Endowment Question!

hardpack

Hello. My first post...I took out a £59 a month Home Purchaser policy over 25 years starting Jan 1989, so my next payment in Jan 2013 is the last one. It is not attached now to any mortgage. The period of assurance ends in January 2014, but I do not need the life assurance element as I am well covered via work. The last statement a year ago said that the total value was now approx £28,000. I would quite like to cash it in now. As it will be paid up, will I receive the terminal bonus if I cash in a year before the assurance element ends? What am I likely to lose (if anything) other than a year of life assurance that I do not need? I understand that terminal bonuses are running at approx 30-35% for these policies, so I would obviously not like to lose that! I have emailed them today asking for a surrender valuation.
Thanks for any help

McKneff

Seems a bit strange to be honest that the assurance bit runs on for a year. Ive never heard of that before.

When does it say the policy matures - jan 13 or 14.

When my endowment matured it paid out the month following my last premium to them.

Are you sure it isnt 3% or 3.5% what you are saying is unrealistic in todays financial climate. You also should be aware that terminal bonuses are not guaranteed.

Just as an aside, how do you know you do not need the life assurance. Do you know that you are definitely not going to die in the next year. Do you have Death in Service with your company so that your family will be looked after.

holly_hobby

Jan 1989 & 25 years = Jan 2014

Premiums, for full and continued benefits, are payable upto the date of maturity.

TBs are not gted.

Hope this helps

Holly

hardpack

Hello, I have the policy in front of me. Policy started Jan 1989. It says payable "lifetime of the life assured up to and inclusive of the payment due on 16-01-2013" and the sum assured is £16219 "payable with profits from 16-1-1989 on the survivance of the life assured to 16-01-2014 (hereinafter called the date of maturity)".


I guess the "payment due on 16-1-13" might actually be the annual payment of £696 which is then paid over the next 12 months in instalments. My mistake! Although I could just pay it in a lump sum of £696 and that would be that!

And no, I don't need any life insurance. I am already very well covered indeed and don't have any dependents!

I thought the annual bonus is around 2% but am expecting a bigger terminal bonus. I know they are not guaranteed but have been substantial over the last few years. I guess that all I can do is ask for a surrender value?

hardpack

holly_hobby wrote: »

Jan 1989 & 25 years = Jan 2014

Premiums, for full and continued benefits, are payable upto the date of maturity.

TBs are not gted.

Hope this helps

Holly

Sorry Holly,I don't understand "gted" in your message above! Can you explain?

holly_hobby

GTED = shorthand for GUARANTEED

TB = shortand for Terminal Bonus

Hope this helps

H

dunstonh

Seems a bit strange to be honest that the assurance bit runs on for a year. Ive never heard of that before.

It cant do. The life assurance runs out at the same time as the plan maturity. Its looking at the payment annualised.

hardpack

Yes, I realised the "final payment" due at the start of the final year is actually a years worth of contributions that can be spread over the year. Anyway, suppose I paid that all upfront at the start of the year and surendered the policy, I might miss out on an annual 2% bonus but I hope I would still get any terminal bonus anyway...I shall see from the valuation I'm asking for.

dunstonh

Anyway, suppose I paid that all upfront at the start of the year and surendered the policy, I might miss out on an annual 2% bonus but I hope I would still get any terminal bonus anyway

You will miss out on the annual bonus. Possibly suffer a surrender penalty and the final bonus may be lower than if you had waited.

Goldiegirl

If you haven't got any pressing need for the money why not wait for another year and get the full maturity value

kidmugsy

If the terminal bonus might be as large as 30% it would be a shame to risk it. If you need a bit of money now it might be better to take out a loan for a year and pay it off when the policy matures.