Endownment

Billy247

My original Sottish Amicable endownment (now Prudential)  with profits has performed well over the years and is due to mature in two years. It was taken out to cover the cost of a mortgage but was later kept as a savings policy after switching from  an interest only mortgage to a repayment mortgage.
The endowment has surpassed the original mortgage value of £40000 and now stands at close to £50000.
My concern is that the covid pandemic going forward is going to eat into the investment. Do I cash in now or hold steady for the next two years
The investment will cost £2000 to maintain over the next two years  The with profits bonus is £20000
Any thoughts would be appreciated.

dunstonh

My concern is that the covid pandemic going forward is going to eat into the investment.

You are 4-5 months too late.   Markets fell due to CV between 24th Feb and 24th March.   Since then they have been zig zagging upwards again.   Many people are now back to around January figures depending on the risk profile (some above, some still just below).

Do I cash in now or hold steady for the next two years

Crystal ball job.

However, other considerations are early surrender penalties.

Old_Lifer

I assume this is a conventional  with-profits policy  as you  do not mention units in your post.

The policy is only payable in full at the end of the term or on death within the term.    If  you decide to terminate your policy early, you will receive the surrender value of the policy, the surrender value of the guaranteed annual bonuses and the surrender value of the current terminal bonus applicable to your policy.

If you continue to maturity ,  since the sum assured and annual bonuses are guaranteed,   your only risk  is the possibility of a cut in terminal bonus rates.     However,  only around half of a  typical with-profits fund is invested in the stock market nowadays, so any cut  in terminal bonus rates is likely to be less than the rate of fall in the  stock market.