Endowment selling .... where's the best deal?

Jasheman

Hey folks

Got an endowment policy that i'm not using to pay mortgage (switched a few years back and should have it all cleared in a few years thankfully .... finally got sensible with my finances)

However, I never did anything about the endowment, passed all the timebars, etc (stupid!) but looking at it now, it's making more sense to cash it and get 3% in the bank / use it towards my mortgage, than continue making payments till 2022 in the hope that Aviva's top up 'promise' (that isn't really a promise and could vanish!) kicks in ....

So, the question isn't advice on what to do, it's more where to sell? I did a quick online quote to see an example and it was better than what Aviva would offer, but i'm sure there are good and bad places to go ... so any help would be much appreciated :beer:

dunstonh

However, I never did anything about the endowment, passed all the timebars, etc (stupid!) but looking at it now, it's making more sense to cash it and get 3% in the bank / use it towards my mortgage, than continue making payments till 2022 in the hope that Aviva's top up 'promise' (that isn't really a promise and could vanish!) kicks in ...

Aviva's mortgage promise is fully funded and people are benefiting from it. Chances are your investment returns are exceeding 3% a year too.

Is it a unit linked or with profits endowment? (former cant be sold), latter can).

Jasheman

Thanks for the quick reply

It's a With Profits, so can be sold. Bonus this year was £150 and that's good compared to the last couple, haven't just jumped into this, I've done the sums and it comes out pretty even but the "cash now" versus the wait for the promise is the debate I'm having .... fully funded or not it's not cast iron from my conversation with them and is funds allowing.

With seven years to go, I'm worried that promise may not hold up

Many thanks for your reply, much appreciated

Thrugelmir

Have you asked what the paid up value would be. There are alternatives to cashing in.

Jasheman

By paid up value do you mean surrender value or something different?

What alternatives are there

Thanks for your reply

Thrugelmir

Making a policy paid up. Means that the policy is given a set value of as today. No further premiums will be payable. The determined sum assured will continue to accrue bonuses until such time as the policy mature.

While you haven't got cash. You've an asset with a known value. That will paid out in the unfortunate event of death before maturity.

You could then use the money saved by not paying the premiums on the endowment policy to reduce the mortgage balance owed.

dunstonh

With seven years to go, I'm worried that promise may not hold up

Why not? It is fully funded and has been in place a decade and the liability gets lower all the time.

fully funded or not it's not cast iron from my conversation with them and is funds allowing.

They have to speak legally and factually on the phone. It is not cast iron as they can remove it. However, with so few endowments remaining and things improving (compared to 2001-03 figures) and Aviva in fine strength, there is nothing to think it would not be.

Bonus this year was £150 and that's good compared to the last couple

That is because the bulk of the return is not on the annual bonus but the final bonus.

Have you factored in surrender values as well? (the surrender value is current bonus, final bonus accrued to date minus surrender charge). What is the difference between the current value and the surrender value?

Jasheman

I appreciate that it's currently strong and Aviva have told me the same but I guess that's just the worry head eh?

Surrender value is £2700 below current guaranteed minimum

Jasheman

dunstonh wrote: »

They have to speak legally and factually on the phone. It is not cast iron as they can remove it. However, with so few endowments remaining and things improving (compared to 2001-03 figures) and Aviva in fine strength, there is nothing to think it would not be.

That is because the bulk of the return is not on the annual bonus

I'd have no comeback in the (unlikely) event of them withdrawing that top up though, and that is what worries me. What's in place to stop corporate greed from screwing me by moving the goalposts

If I call us will they give me a final bonus to date figure. Would maybe aid the decision 😊

Thrugelmir

Jasheman wrote: »

If I call us will they give me a final bonus to date figure. Would maybe aid the decision 😊

Final bonus is paid on maturity. Not on early encashment.

Jasheman

Thrugelmir wrote: »

Final bonus is paid on maturity. Not on early encashment.

Yeah I get that, but would they let me know what final bonus I have accrued to current date? Might persuade me just to stick with the policy (it's £71 a month so no biggy )

Their final projections at 1.5% would see it pay out £29K but that would get £6833 top up as part of their promise .. but that promise still makes me nervous