Help with a Phoenix endowment

digipeep

I had my annual statement and the Endowment originally taken out with Abbey National but now with Phoenix makes for pretty grim reading.

Is there any point in trying to sell this endowment, or just surrender it?

Details.

Start Date: 23/09/1994
Maturity Date: 23/09/2019
Monthly Premium: £50.85
Death Benefit: £34653
Current Value of Units: £8128
Terminal Bonus: £413
Surrender Value: £8541
Annual Bonus Rate between 23/09/2006 and 23/09/2007: 0% ??

Funds:

Managed Life Fund: £4458
With Profit Life: £3780

Maturity Projection:

4% £21300
5.75% £25200
7.5% £29800

Mortgage Rate: 6.48%
Mortgage Payments: £185 per month

I hope this is enough information.

I have no problem with paying the mortgage now as I have investments elsewhere.

Thanks for any advice.

EdInvestor

digipeep wrote: »

Maturity Projection:

4% £21300
5.75% £25200
7.5% £29800

Mortgage Rate: 6.48%
Mortgage Payments: £185 per month

You won't be able to sell this policy.If you surrender it and use the lump sum to reduce the mortgage owed and increase the mortgage payment with the premiums, your return would be 29,131 if the mortgage rate remained at 6.48% to maturity.As you can see the policy would need to perform at almost 7.5% to get anywhere near this level, which is highly unlikely even though half of the money is in a unit linked fund.

Suggest you junk it and either proceed as above or add it to your investments. Only if you needed the life cover and couln't replace it on decent terms might it be worth keeping the policy.