Endowments stick, sell or make paid up?

Allimann

We have 3 endowments, no mortgage and no real need to sell, but concern over paltry annual bonsuses made me wonder if our money could work harder prompted me to look for buyers. We have been inundated with offers all of which are over the surrender values. This leads me to think that we would be better off keeping them. 2 are with NU and the other with the Pru.
Ist NU Maturity March 2010
premiums £62.37
Bonuses to date £15,406.55
Sum assured £17,200
Surrender value £36,261
2nd NU maturity August 2013
premiums £28.32
Bonuses to date £4,351
Sum assured ££7,224
Surrender value £10,682
Pru Maturity March 2014
premiums £69.50
bonuses to date £10,429
Sum assured £16,750
Surrender value £16,750

Question 1: I'm now thinking keep them BUT would our monthly premiums be better spent elsewhere by making them paid up?
Question 2: I'm told that as of today NU will pay £700 per £1000 sum assured as a terminal bonus. Any ideas what the Pru will pay?
Question 3: Stick, sell or make paid up?

martinman3

Allimann wrote: »

We have been inundated with offers all of which are over the surrender values. This leads me to think that we would be better off keeping them.

It means that the surrender values are lower than they really should be and more profit to the shareholders if you accept them.:cool:

Allimann

What does that mean for the terminal value?

notanexpert_4

come on someone, tell him if he should stick, sell or make paid up!

I am in the same boat with an endowment which matures in 3 years. No mortgage and no desperate need to sell. Whilst I appreciate each case is different, I'd be interested to see what the advice is.

EdInvestor

Please post the maturity projections and also the best offers you have received for the policies.

notanexpert_4

If I may kind of hijack this thread while we're waiting for Allimann, here is my endowment with Friends Provident from their latest yearly update.

• start date 29 April 1986
• maturity date 29 April 2011
• target amount £27,075
• monthly payment £40.42

• declared bonuses £7,057.46
• min guaranteed cash sum (incl bonuses) £16,371.46

• Projected pay out:
• at 4% £18,700
• at 5.5% £19,400
• at 8% £20,800

• surrender value at 29 April 2008:
• £15,038

Am also wondering stick, sell or make paid up?

Thanks so much in advance.

EdInvestor

notanexpert wrote: »

If I may kind of hijack this thread..

Please start a new one.

Allimann

NU1 offer £39,700
projected payout 4% £40,100
5% £41,500
6% £42,900
target £50,000

NU2 offer £11,700
projected payout 4% £14,700
5% £15,500
6% £16,500
target £21,000
Pru offer £32,500
Projected payout 4% £40,800
6% £46,300
8% £52,000
target £50,000

All approx as offers have time expired. Maturity projections are from last year. BTW are these projections inclusive or exclusive of terminal bonus?

and I don't mind this thread being hijacked. I'd just like an informed answer from someone.

thanks

dunstonh

BTW are these projections inclusive or exclusive of terminal bonus?

NU issue projections using both methods so you will have to get it in writing from them as to which it is. Dont ring up as they always say it is. Yet when you get it in writing it often isnt.

What is your terminal bonus and what are your mortgage promise values and which NU with protifs fund are you in?

Allimann

don't know to all 3.

Terminal bonus figures aren't known, surely. This is the biggest of all the unknown factors when it comes to making my decision. According to the nice man at NU they have paid out different terminal bonuses in the last 5 years. The highest being £900 per £1000 basic sum assured and the lowest £700 (this year) with an av of £800. I'm assuming that this is therefore variable and anyone's guess, unless I'm missing something. As regards funds I cannot say and I don't think there are mortgage promise values, but I can speak to that nice man at NU again if it would help.

Sorry, I didn't realise that getting advise would prove so tricky. It's complicated stuff, heh?

dunstonh

Terminal bonus figures aren't known, surely.

They accrue behind the scenes (although some declare what you have so far). NU will tell you what you have accrued so far but do not always include that in the projections.

According to the nice man at NU they have paid out different terminal bonuses in the last 5 years. The highest being £900 per £1000 basic sum assured and the lowest £700 (this year) with an av of £800.

Its not really as simple as that as it depends on when you have invested and for how long. For example, some lost some of their terminal bonus this year whilst others increased.

I don't think there are mortgage promise values, but I can speak to that nice man at NU again if it would help.

Some of the promise values are in the £10k+ range although typically its closer to £3-5k. If you dont get the info you could make a decision that could cost you thousands.

Sorry, I didn't realise that getting advise would prove so tricky. It's complicated stuff, heh?

You are not getting advice. The board is not authorised to give advice and even those of us that are cannot give advice via the boards. Its purely discussion. If it was advice, more info would be gathered directly by the IFA from NU and the IFA would tell you if its a keeper or not. Without the info you are basically making a partially informed guess.

NU is more complicated than most as they are a provider that have good and bad endowments and they have also used the system to manipulate the projections to be lower than they have been performing so they can push more people into the time bar. Some providers are nearly always a "dump" and the minute you mention the name you know the outcome. NU need the data to be analysed for more carefully.