Winterthur - yet another endowment bonus flop

dunstonh

Are you sure the advice has now changed?

I've been doing this for nearly 20 years and it has never been a rule.

Really? I'm sure I've seen 'stick with it if you're near the end' suggested by pretty well all and sundry in the past.

Remember most people in the UK are not served by IFAs, they see tied agents. Tied agents do not have the full remit that IFAs have. So when someone when someone asks the tied agent if they should keep it or not, the tied agent would tell you to keep it to the end as they had no choice.

EdInvestor

Many many years ago, insurers held back the entire terminal bonus until the end of the term, I believe. Thus if you surrendered you got a ridiculous amount of money back.This was clearly unacceptable in terms of selling new endowments, and at some point the situation changed so that people surrendering after say 5-10 years or more got back the amount of TB earned so far (minus a surrender penalty of about 5-10%).

But the idea that there was a very heavy penalty for leaving early seems to have lingered on.

It certainly isn't applicable now, when so many endowments are likely to return less than the prevailing interest rate, so that many people can get a higher guaranteed risk-free return immediately, just by cashing in the endowment and paying off a chunk of their mortgage.