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

dunstonh

They tell you what the final bonus has accrued to date.

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

The projection at 1.5% is before charges. Not after charges. They have been performing better than that.

You would be kissing goodbye to that £6833 and the buyer would get it.

I'd have no comeback in the (unlikely) event of them withdrawing that top up though, and that is what worries me.

You are over thinking it. Insurers insure risks. If it was unfunded, I could understand it. However, it is fully funded. That means they have already put aside the money to cover it. They dont have to find money for it. Every policy that gets surrendered means they gain money now as they had already put it aside. If ever it was going to get pulled, it would have been in the credit crunch. No other provider has pulled their mortgage endowment promise. Including the weaker ones or those with no media profile (and Aviva is very wary of its media profile).

The current position is £2700 more than surrender. You would miss out on around £6800 MEP plus future final bonus (which we ignore for now) and use a projection rate that is likely to understate the future returns. So, close to £10,000 would be lost if you surrendered. Do, you make that value up by selling it and not paying future premiums? If yes, then sell it. If no, then should you really sell it?

Jasheman

Is that an estimated final bonus you've given me there (6800) The 6833 I mentioned was the Promise Part which I assumed was separate from the final bonus or am I getting this all wrong????

No i can't make that up, 6 years of payment would set me back just over 5K, it was purely a worry over the Promise but I feel better now you've got explained the funding, many thanks

dunstonh

Is that an estimated final bonus you've given me there (6800) The 6833 I mentioned was the Promise Part which I assumed was separate from the final bonus or am I getting this all wrong????

The promise part is separate. However, you need to factor it in to what you are giving up if you follow through on this transaction. I corrected my typo (its telling me i should go to bed and get some sleep!)

Jasheman

dunstonh wrote: »

The promise part is separate. However, you need to factor it in to what you are giving up if you follow through on this transaction

I was being a bit stupid/tired so looking back your post made complete sense, sorry! I'll give them a bell to see what the accrued final bonus is to date .... to be honest, it was purely the 'promise' part that was worrying me but you've helped alleviate those fears a bit now, so thanks for taking the time to help :cool:

With the gap between surrender and retain, the final bonus, and the promise top up, if they all work out then it would always make sense to retain
:beer:

dunstonh wrote: »

I corrected my typo (its telling me i should go to bed and get some sleep!)

ditto hence the reason i missed your reply last night :silenced:

Jasheman

Final bonus of 25% of sum assured plus 25% of total regular bonus, so I'll stick it out till the end ..... Thanks for all the replies