Endowment policy after selling house

joolesw1972

I might be a bit daft, but it only occured to me this weekend, what do i do with my endowment policy once I sell the house?
We don't currently live in the house, we exchanged on Fri, due to complete this Fri, selling price will repay mortgage, fees etc and leave me about 30k profit, (deposit for next house when we decide to buy) was happy that we made a profit, mortgage paid back etc didn't think about endowment policy!
Will contact the bank about it this week, but wanted a bit of advice first, am I right in thinking we can keep it on without it being linked to the house? If so, I think we should keep paying it for now until we decide what we're doing, but I understand there is an element of life insurance in it, will I stop paying that? Will it be cheaper than I'm paying now?
We intend to get some financial/mortgage advice about what to do longer term, but can anyone explain how it works for now?
thanks

jayss

You can keep paying, I did for a year or so then cashed it in as knew wouldn't be buying again.
Whether it's worth it for you depends on its yield and and redemption penalties.

dzug1

You can surrender it for whatever they offer you or keep it on to maturity when you should (famous last words) get more


I don't think you can separate out the life and investment parts - but whatever you are paying for life cover is likely to be cheaper than you could get now given you are so many years older.

kkgree1

I was in a similar position when I sold my last house. I have kept the endowment purely as an investment and it has another 10 years to run. Mine is a units based policy.

I did look at surrending it when I sold (just over 3 years ago) but I would have only got back a little over what I had paid in (7k).

It is still slightly underperforming from it's original projection of 32k but it also provides life/critical illness cover which I save money on elsewhere.

If you do decide to keep it, make sure you get the mortgage company removed as having an interest in it!

00ec25

there are 3 options:

a) surrender it to the insurance company and get a very poor surrender value - avoid this unless you are desperate for money

b) sell it on the secondary market which should give you more than the surrender value but less than the maturity value. the rate you may get will be variable, indeed it is possible no one will buy it at all. Obviously its value will depend how long there is to go and how good your insurance company is with its terminal bonus history meaning it may not be much over surrender value

c) keep it on, paying any remaining premiums and wait for normal maturity so as to collect the termination bonus

This used to be quite a popular thread topic - here is an example thread - notice the reference to any shortfall promise over and above the terminal bonus.
https://forums.moneysavingexpert.com/discussion/3081642

In my case, when i asked about removing the life cover I was refused. Instead they offered to revise the sum assured downwards and thus have a smaller monthly cost, but it still included life cover so i kept with the original. Rightly (probably wrongly) I have been like that for the last 10 years with another 6 to go as I had a windfall and paid off my mortgage long ago so kept the policy as a (with hindsight poor performing) investment