Selling A Norwich Union Endowment Policy

Towner_2

Thank you EdInvestor and DunstonH for your invaluable information. I need to reduce my monthly outgoings by paying off a loan and the only way I can do that is if I cash in my endowment, convert my mortgage to full repayment and use the endowment cash to pay the loan off. I am 13 years in to a 25 year endowment of £50 a month to pay off £35000. NU offered £8500 ish to surrender it, is this a good offer or do you think a 3rd party company would offer more, or am I doing completely the wrong thing!!!!

EdInvestor

Can you post some more info:

Guaranteed sum assured
Declared bonuses
Surrender value
Monthly premium
Maturity date
Maturity forecasts

Interest rate on loan to be repaid

Interset rate on mortgage

Towner_2

Hi EdInvestor, Sorry for the delay in replying but have just come off the phone to NU.

Guaranteed sum assured = £10665.00
Declared bonuses = £2664.53
Surrender value = £8328.60
Monthly premium = £50.10
Maturity date = 2019
Maturity forecasts = N/A as another dept calculates this. To be posted to me. The original target total is £35,000.

Interest rate on loan to be repaid = 5.7% A + L

Interset rate on mortgage = 5.59 % A + L

Thanks for taking the time to help me out EdInvestor, much appreciated.

EdInvestor

If you surrendered the endowment now and used the lump sum to pay off a loan @ 5.7% also paying the endowment premiums off the mortgage , at the end of 12 years you would have the equivalent of 26,469.

So you need to compare that figure with their forecasts when they arrive.Suggest you also seek sale quotes here:

https://www.apmm.org

If you need to replace the life cover you should also seek quotes for that, as that premium would need to be deducted.

dunstonh

What was the terminal bonus and mortgage promise values?

Towner_2

Hi DunstonH,

Terminal Bonus = £2664.53. The man quoted the same figure for the 'Declared Bonuses' so am not sure if the first man told me incorrectly or the second!!!

Last Declared Bonus = £39.38

Mortgage Promise Value = £25243.00

Hope this is what you needed to know and thank you for your continued help.

Towner_2

Update!! Just been called by NU and was told that the figure of £25243 was in fact the Sum Assured. I have to call back tomorrow to get the MPV.

EdInvestor

:rotfl: :rotfl: :rotfl:

It's chaos out there

Almost makes you feel sorry for IFAs when you realise they have to deal with this sort of "service" every day.

Towner_2

The MPV is £5908.
My endowment is supposed to return £35000, so if it has a shortfall NU will pay up to £5908 to get it back on track at maturity. Please correct me if I have misunderstood!!

dunstonh

That is correct. If it falls short, they will add upto £5908 to make up the shortfall.