Sell or keep this endowment.

Shambler

Hi,

here's the details.

Policy started 12/12/1990, Unit Linked
Maturity date 12/12/2015

Guaranteed sum assured £44,000 (pays £44,000 on death)

Current surrender value £16,407.89

Monthly premium £61.33


Estimated cash values...

4% £26,700

6% £30,900

8% £35,700


Company says that no bonuses, terminal or otherwise apply.

dunstonh

Its unit linked so there will be no basic sum assured or any bonuses. You will need to name the company and investment funds you are in as the projections mean nothing without knowing that.

Shambler

Thanks dunstonh,

company is Barclays Life...do i just call them to find out what funds the money is invested in?

On the form it just says 'Life Managed Fund 100.00%'

Blu_2

I too have an endowment policy with unit linked funds and profits. I no longer need this endowment but I was advised to retain this because of linked life insurance with critical illness cover. It's currently projected to meet the target value.

Should I sell or keep? and is there a risk I will receive less than I have paid in??

Thanks

Shambler

Update.

The only info that Barclays can give me is that it is a Life Managed Fund and the current bid price is 3.2800

dunstonh

Its their default fund. They have others which offer greater potential. That fund would be expected (as much as no-one has a crystal ball and can tell) to perform around the 6-8% mark. A revised fund spread could see potential closer to 8-10% but it would depend on your risk profile.

You would also need to check the ongoing charges as some endowments lower their charges in later years and if you are happy to remain with an investment linked mortgage, then moving to ISA may be the better option (depending on your investment experience as well as a charges comparison).

I'm being vague on to what you should do as there is no way for us to say one way or the other as that would be classed as financial advice and the board is not regulated to allow that.

Find out what the surrender penalty is (current value vs surrender value). Find out the cost of replacement life cover (you can do that online at various sites) and then the difference is what is available to invest. That can then be projected forward to see if it offers better potential or not. Or, if you are not inclined to go with investment risk, then you may prefer to compare it to repaying part of your mortgage and switching to repayment mortgage.