DJB

I've decided to cash in my 7 year old endowment policy and change to a capital repayment mortgage. I have been offered a reasonable surrender value from CGU but I am told that you can sell these policies for much more than the surrender value.

I've tried Robin Lloyd Associates (you may have heard their c**p advert on the radio) but they could not better CGU's surrender value.

Any suggestions? (4 new SO-2's may depend on this).

D.

[This message has been edited by DJB (edited 12 December 2000).]

paul w

D,
Try the financial mail on sunday there are loads of companys advertising for them in there,you can only sell with profits policies for some reason.I sold one a few years back and a mate sold one recently,both were surendered as the price could not be beaten.
Dont listen to the to$$ers who say its the worst thing you can do,i doubled the value of mine in 3 years after surrendering it,you'll be lucky to clear 5% a year after costs leaving it where it is.
cheers Paul

Dave T-S

Key factor is how long it has to run. If it is coming up to maturity it is worth a lot more. As Paul says try the Sunday papers. If it is 7 years old it will have been paying loads of commission to the salesmen and I doubt if it will be in, or much in, profit yet.

You may as well get rid, not an effective way of investing money today (not a criticism, i've also had loads of endowments in the past).

Neil Smalley

IF you can afford to keep it going, do so.

sunilp

My CGU endowment policy broke even after only 3 yrs, i.e. premiums paid <= surrender value.

DJB, email me offline with the details and i might be interested.

Cheers

Sunil

APJ

One of the key features of an endowment is the terminal bonus, paid upon maturity. Surrendering a policy before maturity means you lose out on this bonus, which can be fairly substantial.

If you've received a letter off your endowment provider because the policy is linked to the mortgage (as required by the ABI) this should give a projection to the maturity value of the policy at 4%/6%/8%. The letter would contain a number of options if your endowment is off track to paying a mortgage, including converting just part of your mortgage to repayment, and keeping the policy in force.

The rule of thumb is: the first 2-3 years of an endowment pays the set-up costs (including the salesman's fat wad) so it is only after this time that it grows in value. Personally, I would never surrender an endowment unless in dire circumstances.

Get all the information you can before making a decision - see an independant financial adviser - only then can you make a balanced judgement. Details of IFAs can be provided on the IFA Consumer Hotline on (0117)9711177.

Andrew

DJB

Thanks for all your replies.
It is an endowment policy which is linked to a mortgage and it will not mature until 2018. I've decided to change to capital repayment so that when I move house in a few years time, I will have more capital to put towards a new property.

Its got to go so if I cannot get better than the surrender value (which is about two thirds of amount paid so far), I will surrender it to CGU anyway.

D.

XRS

D,

This may be of interest. I have never used them but they may provide an alternative.

HunterB

DJB,

I agree with Neil, don't surrender it if at all possible. You'll get next to nothing for it after 7 years but, if you keep it going for the remaining 18 (and the premiums become a smaller proportion of your monthly outgoings as the years go on), you'll be in for a cash windfall when it matures (and it also gives you the option of taking out another interest-only mortgage in the future without having to fund another endowment, with all its up-front commission costs). You say it's linked to your endowment mortgage, but I doubt if it is. You've been using it as a means to pay off the capital element of the endowment mortgage at the end of its term. Don't cash it in if you can find a way of affording to keep it.

BarryK

We did the same as you a few years back. We sold to a company called Policy + I think they have a web site. The Insurance Co surrender value was less than we'd paid in over six years. Policy + gave us what we'd paid in plus what we'd have probably gained if it had been in a Building Society at the time.

They have to have a solicitor check it has no existing charges over it and all that stuff, a bit like when you buy a house, but in the end we got what we felt was a fair deal.

We kept another endowment running as the return would have been rubbish.

DJB

Thanks again everyone.

I'll try PolicyPlus - in fact I've already tried to submit the on-line quotation without success. I try again tomorrow or phone them.

D.

ps sorry about the thumbs down sign at the top, must have clicked it by mistake.

[This message has been edited by DJB (edited 14 December 2000).]