Surrender / Sell endowment

g00se

I've had a scottish provident endowment running for 20 years with 5 yrs left to go and thinking about surrendering / selling it. Surrender value is 21,000 not sure how to go about selling or which companies to approach. I've seen a few sites on the internet that do offer to buy endowments but want so much information to get a value i'm a bit worried about giving this information without knowing they are genuine companies. Any knows any companies i can approach for a valuation that are legit i would greatly appreciate it.

Old_Lifer

A company which buys endowments will naturally need to ask for details of the policy. They may or may not offer to buy your endowment since not all endowments may meet their criteria.


If you need to raise money for a particular reason and have already decided to surrender the policy, selling it may be an excellent idea, since you will obtain a little more for your policy than you would by surrendering it. On the other hand, if you do not need the money you may take the view that obtaining an offer for your policy perhaps indicates that your policy is worth keeping.


If you have a conventional with-profits policy, it is important to realize how the annual bonuses work.



Once added to the policy the annual bonuses are guaranteed and cannot be taken away. However, they are reversionary bonuses, which means that they only become payable when the policy becomes payable i.e. at the end of the term or on death within the term. If you decide to terminate your policy early by surrendering it, the surrender value of the policy will include only the current surrender value of the annual bonuses (not the amount shown on your annual bonus notice). The companies that buy endowments will be aware of this but I would think that few policyholders will realize this.

SonOf

You can only sell endowments that are invested in a With Profits fund. You cannot sell unit-linked endowments. Scot Prov did both. So, you need to check what yours is.

g00se

Thanks for your response i don't need to surrender the policy but thinking along the lines that interest rates have been low for so long that its not worth keep paying into it. I will see what the value is to see if it is worth keeping, any companies you would recommend?

SonOf

y but thinking along the lines that interest rates have been low for so long that its not worth keep paying into it.

Your endowment policy investments are not linked to interest rates.

[Deleted User]

Hi,


if you've been paying it for 20 years then you should be well in profit by now, also you'll be paying a pittance now compared to what you were paying at the start, stick it out.

Old_Lifer

Most of the long term growth in a with-profits fund comes from equities.


During the boom-time of endowments in the early 1990's (circa 1993 I think) I was curious at what price second-hand endowments were being sold on, so I wrote to one of the firms selling these and expressed an interest in purchasing a second-hand endowment. I received a list of several dozen endowments for sale.


At that time it was my understanding from newspaper articles that policyholders were being offered around 7 -10 percent more than the surrender value for their policies. The policies on the sales list were offered for sale at around 30 percent more than the surrender value. I received two or three further monthly sales lists then, presumably because I bought nothing, the lists ceased.



As the boom-time for endowments has now long gone, I can only assume that the market in second-hand endowments is much smaller and I assume margins may well be lower now.



I have absolutely no idea what level of mark-up is applied to second-hand endowments nowadays.



As I said at the start of my post above, if you are selling an endowment you need to check that your policy meets the criteria set by the purchaser. If they make an offer it indicates than they expect to be able to sell the policy on to a new owner. In order to accquire your policy the new owner will have paid rather more than you have received for your policy, will have to pay the ongoing premiums to maturity and will presumably still expect to make a profit.


If you do a quick search on the Internet, I assume you will find the names of a number of companies that deal in second-hand endowments. You should quickly find who are the main players in that market.