1 year of my endowment to go...

Alun

Hi all,

I've got one year left on my Aviva Low Cost Endowment policy and before I give Aviva a call, can someone answer a question or two for me.

Since 2012, I've noted down the surrender value as a guide, and every year the surrender value increases more than the premiums that I pay - eg, £590 a year is paid and on average the surrender value has at least increased by more than double my premiums and sometimes tripled - eg an increase of between £1200 and £2000 every year.

This year the increase of surrender value is only £360...

Every year I also get details of the bonus rate - this year this is what it says

What are the new bonus rates?

Your policy receives regular bonuses. We guarantee to pay them with the sum assured at maturity,  assuming  you  continue  to  pay  all  future  premiums  until  your  maturity  date.  This value  is  referred  to  as the  ‘Guaranteed  minimum value  at  maturity’ which  is  shown  in  the table below.

Following a bonus rate review on 31 December 2020 we declared the regular bonus for your policy.The regular bonuses for 2020 are 1.75% of the Sum Assured and 1.75% of all your previously declared bonuses.

So...

Why has the surrender value gone up so little?
Is it possible that next year the premiums will be higher than the actual increase of surrender value again?
Is it worth continuing on this basis for 1 more year?

Thanks

Alun

Peter999_2

Have you got a Mortgage Value Promise (MVP).   That made about £6,000 difference to my endowment policy which finished a couple of years ago.

When mine did finish, I remember the surrender value being a lot less then I actually received.     It was supposed to make £33,500 and actually made £31,750 so I wasn't disappointed in it.

dunstonh

Why has the surrender value gone up so little?

You may have heard about coronavirus.  Its been on the news a fair bit.  2020 had a stockmarket crash in it. The third largest drop in the last 20 years.   With profits funds tend to lag.  So, slower to fall and slower to recover.

Is it possible that next year the premiums will be higher than the actual increase of surrender value again?

it is possible.

Is it worth continuing on this basis for 1 more year?

If you have a mortgage endowment promise (MEP) then it would be lost on early surrender.

Old_Lifer

Has the rate of terminal bonus changed ?