Surrendering endowment

dunstonh

Ok I have just has my yearly statement with it's 'RED ALERT' High Risk of not reaching it's target

Dont read anything into the colour. As an endowment complaint cannot be timebarred until it is a red alert, a lot of providers have dropped amber or have used projection rates that make the endowment red so they can start the timebar clock ticking. For example, NU would show you as a red alert even if you were £1 short of hitting target using the mid projection.

They say that the average growth of my plan is 3.88%

Thats probably without final bonus which would be about right. As I mentioned higher up, I did a review of an SL endowment not too long back (as well as one last week) and that was getting 7.1% if you included final bonus to date.

They say that the original 'promise' of £3,410 has been scrapped and it may be between £1,364 and £2,046 although it could be zero

The promise was capped which is why it now sits between £1364 and £2046 based on those projection rates. It will be zero if it hit target or reduced if the promise was to take you over target. (i.e. if shortfall was £500 you would only get topped up by £500).

We dont know what future returns are going to be but I would "estimate" that somewhere between £45k and 48k is likely with SL (assuming final bonus accrued to date is included in that projection) with mortgage promise value on top.

It may be worth getting a value for selling the policy although with less than 3 years to go, you may not get a lot of interest in it.

Have you taken a look at Gorgeous George's thread on standard life endowments to get an idea of how they have improved in recent years?

glastowinebar

Thanks very much for your reply dunstonh

No I haven't seen that thread, I'll go and check it out

thanks again

EdInvestor

glastowinebar wrote: »

Projections are

4% = 43,600
6% = 45,800
8% = 48,100

If you surrendered the policy and used the lump sum to reduce the mortgage also overpaying it by the amount of the endowment premiums to maturity, than your return would be 48,930 beating all the projections.

That's a no risk, guaranteed return at that interest rate.

If you don't need the life cover, there seems little point in holding on to this policy.

glastowinebar

Thank you for that Edinvestor

glastowinebar

Can somone please point me in the direction of company's that buy endowment policies...just for general enquiries

EdInvestor

https://www.apmm.org covers them all

glastowinebar

I know what the sum payable on death is..£54,510, but can you tell me what the other two mean?

If you read my post above that is all the info I have


"With-Profits" Basic Sum Assured:*
Sum Payable on Death:*
Total Reversionary/Current Bonuses Attached to Policy:*

Thanks

EdInvestor

The basic sum assured plus the reversionary bonuses is the amount you are guaranteed to get if you hold the policy to maturity and keep paying the premiums..

Unguaranteed terminal bonus (if any) is on top of that.

Sum payable on death is what it says.

glastowinebar

I'm haven't been guaranteed any amount, just the projections

dunstonh

Yours is a unitised with profits endowment and not a conventional with profits endowment so a basic sum assured doesnt exist. Upside is that unitised WP funds tend to be a little better than older conventional with profit funds. This is why they have been typically performing above the target growth rate in recent years.