Surrendering a unit linked Endowment policy early

sparkie55

I have a unit linked endowment with Phoenix Life, details as follows:-

Start date: 26 Feb 1990
Maturity date: 26 Feb 2015
Monthly payment: £65

The policy is not linked to a mortgage as this has been paid-off so the life cover of £45k is no longer relevant.

My dilemma is whether or not to surrender the policy now or let it run for another 2 years.
The current surrender value with no penalties (quoted last week) is £31,200; I appreciate that this can go up or down on a daily basis.

If I let the policy run to maturity date I will pay-in another £1560 with no guarantees that the policy will be worth any more than the current value - it may even be worth less.

What should I do....?

Any advice appreciated.

holly_hobby

As you are aware your current quoted UL surrender value IS subject to change, depending upon the value of the underlying units onthe day of encashment.

Surrendering early also does not lose any terminal bonus, as TBs don't apply to UL policies.

Its no longer being used as a mge repayment vehicle, and you don't need/want the 45k life cover.

You have a premium of £65 per mth, which will continue to pch additional units in your chosen fund (notwithstanding cancellation of units for the cost of life cover) , but whether your SV (even with the additon of further units over the next 2 yrs), will at least meet but hopefully exceed your current fig & the additional costs of £1560, is literally anyone's guess.

Are you in the WP fund or did you chose more speculative fund(s) ?

As a general, I would say that if you are happy with the SV as at today, you are finding it difficult to maintain the policy on a monthly basis and don't need the 45k intergrated life cover, and want to avoid any further loss on return of prems - then the answer is pretty simple I feel.

These are just my thoughts (based on the info provided), no one can really "advise" to surrender, as none of us can predict what future market returns will be or the proficiency of the providers fund managers, so you must make your own decision as to continue servicing the plan.

Others will be along with more comment and views, so just make your decision after evaluating them all and your own feelings on the matter.

Hope this helps

Holly x

sparkie55

Many thanks for your comments Holly.

I'm not sure what you mean by WP fund but it is a managed fund (series whatever that means....?

I know its the luck of the draw when it comes to values at any given time but when I compare the June 2012 statement value of £26,300 to the surrender value I've just obtained it represents quite a healthy growth of £4900 in 8 months but what will happen in the next 2 yrs even with additional units purchased is anyones guess I suppose, especially as the markets are so volatile at the moment.

Do I want to take approx £31k now & save £65/mth or speculate on the maturity value substantially increasing having paid in another £1560 & have to wait another 2 yrs for the money?
I wish I had a crystal ball - but then so does everyone else!

Any other comments/advise welcome.

sparkie55

Sorry Holly, I just realised WP fund means 'with profits' I think... how could I tell if it was a WP fund?

The endowment was originally supposed to pay the mortgage of £45k on maturity but that was never going to happen so I converted to a repayment years ago & kept the endowment going as a 'savings plan'.

The mortgage is now paid off so I just debating what to do with the endowment....