Norwich Union Endowment Future Rating/Poss Sale !

dibbs26

Just rec my yearly statement to find I have been given a bonus of £17 !!!.
Norwich Union says that the independant agency standards & poors have rated them as 'AA (VERY STRONG). I am thinking of selling the plan and getting out of it all together but with this rating I am now thinking again...any advice greatly rec !!
cheers

dunstonh

Pru & Nu are the two strongest WP providers. You need to remember that the stockmarket crashed and is only now beginning to recovers. They have lowered bonuses whilst the underlying fund returns to its old value. Once they have recovered past loses, then expect the bonuses to creep up again.

Expectation is that most of the increases will be in the form of terminal bonuses rather than annual bonuses as this is more secure for the insurer.

pmtech

can anyone help my niece is in the process of buying a house in plymouth and has just been told that there are 3 outstanding loans on the house and they stay with the address so the house has fallen through, and her solicitor is trying to charge her £7000 for his services including we hope stamp duty on the house, unfortunately there is no one down there to help her as i live 300 miles away.

EdInvestor

Hi dibbs

Post the following info and we can take a look:

Guaranteed sum assured
Bonuses so far
Monthly premium
Maturity date
Surrender value

dibbs26

Hi,
Here Goes :

Guaranteed Sum Assured = £11105
Bonuses So Far = £3444.59
Monthly Premium = £47.15
Maturity Date = 7th June 2018
Surrender Value as 23 rd June 2005 = £5844.07
Compensation off Norwich Union for miselling is £4897.82

Converting my mortgage to repayment, selling this endowment and taking the compo would leave me with approx £26k mortgage which I know will definately be paid at the end of term...........piece of mind.............
Cheers Ed !

EdInvestor

Hi dibbs

If you keep paying the endowment you'll get a minimum of 14,549 when it matures, plus whatever bonuses they additionally pay.

Surrender it, and put the money in the bank @3.5%, paying in the premiums as well, and you should end up with 18,399.

Put both the compo money and the surrender proceeds in the bank @3.5% plus pay in the premiums to maturity and you should end up with just over 26k....

....and of course you'd make a better return if you reduced the mortgage amount with the capital and devoted the endowment premiums to increasing the mortgage payment.

Does this sound like the general idea?

dunstonh

Surrender it, and put the money in the bank @3.5%, paying in the premiums as well, and you should end up with 18,399.

Saw a Pru endowment statement today and it showed the annual bonus was 3.5%. So, it is important to look at the current bonus on the plan to make sure you dont end up paying a surrender penatly for nothing. I havent seen an NU one recently (at least not one with enough info) although they do tend to be similiar to Pru.

dibbs26

Editor wrote:

Hi dibbs

If you keep paying the endowment you'll get a minimum of 14,549 when it matures, plus whatever bonuses they additionally pay.

Surrender it, and put the money in the bank @3.5%, paying in the premiums as well, and you should end up with 18,399.

Put both the compo money and the surrender proceeds in the bank @3.5% plus pay in the premiums to maturity and you should end up with just over 26k....

....and of course you'd make a better return if you reduced the mortgage amount with the capital and devoted the endowment premiums to increasing the mortgage payment.

Does this sound like the general idea?

Yes not bad. I am tempted to just get out of the whole thing, put the compo and the proceeds of the endowment off the capital amount and then live rest assured that once the final day comes in 13 years time I know for sure it will be nil................thats something which an endowment cannot guarantee.....whats your thoughts guys ?

EdInvestor

If you want peace of mind, and no risks, it's the way to go. If the markets were still delivering double digit returns like the old days, one might say it's worth sticking with the policy.But they aren't - the policy will be hard put to equal the return gained by paying off the mortgage, given the charges.If you don't need the life cover,there's not a lot of point in holding on to this particular policy, IMHO - why take the risk for likely very little gain, if any.

Ifyou do need to replace the life cover, do it before surrendering the endowment.

Moneysavers should note the position may be different with other endowments,and other policyholders' circumstances.You can't assume they are all bad.

dibbs26

Thanks ed. If I use the money to pay off the mortgage I will end up with a £26k repayment mortgage. Is it a must that you should have life cover?.
You mentioned about sorting life cover b4 the endowmnet is surrended.....why is this.........,.ta

dunstonh

Is it a must that you should have life cover?.

No. If someone is going to be financially worse off in the event of your death, then it is common sense to have it. (wife/husband, children etc).

You mentioned about sorting life cover b4 the endowmnet is surrended.....why is this.........,.ta

Surrender the endowment and life cover ceases at that point. It may take a few weeks for a life policy to be arranged and you would leave yourself without cover during that time. Also, if you have had a medical condition of some sort, it may leave you uninsurable and the endowment may be valuable life cover which you cannot replace with a new plan.