Surrender endowment?

plmonk

Hi

I have an endowment which has been running for approx 10rs. Its worth about 10k. I am considering surrendering it as I need the money to put towards buying a house. I have alternate means of raising the deposit.

Should I cash it in or use alternate means bearing in mind I believe most endowments make most money in the last few years? (it has 5 yrs to run until maturity)

Thanks

whu

depends what you are paying as a premium (as this will help work out what you have made so far) and what funds it is invested in or is it a with profits policy?also who is the policy with?

EdInvestor

Post some info about it

Provider
Guaranteed sum assured
Declared bonuses
Surrender value
Monthly premium
Maturity date
maturity forecasts
Likely interest rate payable on future mortgage

plmonk

Clerical Medical
Sum assured 7077
Bonuses 5000
Surrender (as of last week) 10,172
Monthly premium 21.72
7 Feb 2013
Don't know about maturity forecasts except its not likely to pay off the predicted 21000 stated at commencement.
Its not linked to a mortgage

plmonk

Anyone care to comment?

mollymania

im looking some advice about an endowment policy but its not mortgage linked. we took out a junior bond 4yrs ago for our daughter its a unit linked endowment policy and wanted to know could this policy be one of mis sold ones and should i cash it in now and move it elsewhere?

koexelek

plmonk wrote: »

Anyone care to comment?

If you encash it now, biggest downfall could be missing out on the terminal bonus.

Usually, with a with profits policy, they give you a bonus each year, but hold a bit back. Then they give you all the bits they have held back in one big bonus at maturity

Dick_here

You've been paying £21pm for 10 years and your policy is worth £10k already ? I doubt it somehow.

maninthestreet

£5,000 bonuses added sounds high as well. I've been paying £50/month into an FP WP endowment for 15 years, and the bonuses added are only £7k, with a £12.5K surrender value.

koexelek

!!!!!!_here wrote: »

You've been paying £21pm for 10 years and your policy is worth £10k already ? I doubt it somehow.

Paid in £2520 and now worth £10k:eek:

Wish I'd taken one of those

EdInvestor

Since the OP's plan has only 5 years to maturity it seems likely he's been paying in for more like 20 years than 10.

If he surrendered the policy now and used the money for a deposit, so reducing the amount he had to borrow at say 6%, and used the remaining premiums to maturity to help pay the mortgage, then his return at maturity on the figures given would be 15,149.

He needs to compare that figure with the maturity forecasts given by CM.

Re terminal bonuses, these days you get accumulated TB when you leave early, apart from (sometimes) a small surrender penalty (5% or less). At the moment many people are better leaving before maturity, as TBs are being reduced due to the fall in the markets over the past few years.

You could try selling this policy at https://www.appm.org

It's a useful check on any hidden value.