unitised with profits

tam1970

having now paid of my mortgage my partner and i still have our unitised with profits profitbuilder with scottishlife.we pay a monthly premium of just under £102 for a sum assured of £29700.its now six and a half years old with a value of £3600.is it worth keeping it as along term saving plan.(bonuses seem to be non existent to me)or is it better to put the money elsewhere and get cheaper life insurance to cover us as we are both just mid thirties.i understand its a long term investment and things can turn around but have been also told this type of policy isnt very good.any advice would be gratefull as i asked for imformation from scottishlife but it wasnt very helpfull.thanks.

dunstonh

many of scot life's plans have access to their unit linked range of funds so fund switching may be an option for you. You should check that along with ongoing charges.

Scot life are limited in what they can tell you as they are not authorised to give any advice.

EdInvestor

Can you post the forecast maturity values of the plan?

tam1970

4% 35400 6% 45500 8% 58700 pounds.also if you could help .whats mortgage interest benefit.scottish life has asked if i need to change it.do i still need it as i have cancelled both our other mortgage protection policys that were sold to us when we took out this policy.thanks.

EdInvestor

tam1970 wrote: »

4% 35400
6% 45500
8% 58700

If you surrendered thew policy and put the money on deposit @ 5% net also paying in the premiums to maturity you would end up with 47,482 guaranteed, which is more than their forecast at 6% risk based growth which they are unlikely to meet.

Suggest you bin this one and either go for a cash ISA at a good rate or a stocks and shares ISA withe soime decent funds in it and rebated charges.
Replace the life cover before you surrender if necessary.

dunstonh

Suggest you bin this one and either go for a cash ISA at a good rate or a stocks and shares ISA withe soime decent funds in it and rebated charges.

On what grounds do you make that recommendation when you dont know what the charging structure of the endowment is, what alternative funds are available and what the cost of replacement life cover will be?

EdInvestor

Endowments are obsolete products.For a start you are paying 20% tax on gains - move to an ISA and gains are tax free.

dunstonh

EdInvestor wrote: »

Endowments are obsolete products.For a start you are paying 20% tax on gains - move to an ISA and gains are tax free.

Endowments are obsolete. However, with many, the bulk of the charges were taken at the start and the ongoing charges can be much lower than ISAs. Often half as much. Whilst the with profits fund may not be much to write home about, the unit linked range may offer some attractive options.

Most life funds do not have the maximum 20% taken from them. For example, equity funds get the 10% tax credit on dividends. However, you already know that from other threads. You just choose to ignore it and post misinformation.

There are also surrender penalties to consider, along with cost of replacement life cover.

Surrender/sale may be the right option but there isnt enough information on this thread to say which is best because not enough information has been posted or found out.