Standard Life - How much will my policy be worth tomorrow?

Gorgeous_George

Hi again

Today sees the start of May and yes, I still hold the policy. A friend has a policy maturing in July so I may as well wait and see how that does.

Monthly premium is £45 and surrender value is now (with May 07 in brackets):

Basic value.........£21,459.36...(£20,459.09)
Final Bonus...........£4,549.39....(£2,414.18)
Total plan value...£26,008.75. .(£22,873.27)

GG

Edit: 3,500 posts! I should get out more.

dunstonh

I thinking waiting for your friends maturity is a good idea. However, SL did allow different target growth rates to be set on commencement so dont look at shortfall/surplus but look at the change in value from earlier statements. (if they dont mind giving you that info).

Keeping the policy has been a resounding success for you so far. It has also highlighted the risks for others who may have only relied on projections when making decisions.

In May 07 your projections until Maturity (2010) were: 31/05/2007...£26,400...£27,600...£28,800.00

Yet in just 12 months you have almost surpassed the lower projection value and similar growth in the remaining 18 months would see you come in with a surplus position without needing to have a mortgage promise payment.

silvercar

Surely the nearer you get to the end date the more you lose (ie the terminal bonus) by not waiting until the end. Or am I missing something?

Gorgeous_George

Certainly been good so far (at least, since last year).

I agree that, historically, the closer to the end the more you could lose by surrendering/selling. However, my policy carried an "Early Maturity Option" so may include terminal bonuses. IF the value drops now there would be less time for it to recover.

Anyway, SL's current forecasts for maturity (1 Feb 2010):

3.75%....£28,200
5.5%......£29,000
7.25%....£29,800

FWIW, my forecast is £31,800 - assuming it continues to grow at the average rate since Oct 2006

GG

Edit: I still should have canned it in Jan 2003 when it was worth £24,149.66 (£16,428.34 + £7,721.32) before it was slashed to £20,863.13 (£16,263.74 + £4,599.39) in Feb 2003:(

Gorgeous_George

Well, my mate has had a 'final' estimate of his SL policy. He was angry.

There was no significant difference with his statement the month before. It seems that the 'surrender values' include any terminal bonus accrued to that date.

I shall update on Sunday with my latest data but I feel I'll be canning the policy in June - just 18 months from maturity. Cosidering the twists and turns that I've 'enjoyed' since I was a naiive 21 year old, it is amazing that I've come this close to completing the policy.

If only it had matured 5 years earlier.



GG

EdInvestor

Gorgeous_George wrote: »

Well, my mate has had a 'final' estimate of his SL policy. He was angry.There was no significant difference with his statement the month before. It seems that the 'surrender values' include any terminal bonus accrued to that date.

This has been the case for many years.

Gorgeous_George

1st June and the policy has a surrender value of £26,207.12.

Basic value...£21,543.05
Final bonus....£4,664.07
Total...........£26,207.12


Estimates at maturity (1 Feb 2010)
3.75%...£28,300
5.50%...£29,100
7.25%...£29,900

This may be the last update as I intend to surrender the policy soon. However, over the last year, I make it a 10.7% tax-free return.

GG

dunstonh

It will be a shame for you to do that (for us anyway) as it has shown that the projections are pretty unreliable as the sole source of data for the quality of your endowment. Your endowment is clearly growing by more than the 7.25% upper rate and trending towards hitting target and maybe a small surplus. Plus its growing each month by more than you are paying (to be expected in the later years).

I was hoping you would go to the end so we could see how yours jumps up on maturity.

Gorgeous_George

dunstonh wrote: »

I was hoping you would go to the end so we could see how yours jumps up on maturity.

If there was no risk of losing, I'd happily continue.

My friend's policy matures next month but his letter detailing the likely value that he will receive doesn't show any increase over and above that of a normal month.

GG

EdInvestor

Gorgeous_George wrote: »

Edit: I still should have canned it in Jan 2003 when it was worth £24,149.66 (£16,428.34 + £7,721.32) before it was slashed to £20,863.13 (£16,263.74 + £4,599.39) in Feb 2003:(

You got off very lightly with only a 14% cut, are you sure the TB hadn't been slashed earlier (perhaps in around Sept, 2002?)