Ian Griffiths

Help fiscal experts, is there a way to estimate the value of an endownment mortgage part-way through the term? I appreciate there are probably a lot of variable factors but I'm prepared to loose accuracy - I'm only after a ball park projection to see exactly how the money grows.

For example, investing £2400 per annum over a 25 year term the value stands to be around £77000 on completion. Effectively earning £3080 per year for the term. Would cashing the policy in 7 years earlier 'cost' 7 x £3080 ??? More? Less? I fear loosing more, if so how much more.

Thanks very much in advance.

paulr

Is it unit linked or with profits?

Ian Griffiths

With profits.

paulr

Hi,
Fistly i'm NOT a financial adviser so its best to get propper advice before you do anything.

Does it actually have seven years left and you're thinking of cashing it in.If so you can get a value from the insurance company of what its worth.If you do want the cash you can also sell it to a company that trades in secondhand endownments.You can often get a better price than cashing it in with the insurance company especially if you've paid in for 18 yrs already.They can be found in the money section of mail on sunday/sunday express.

What will it be worth?
On with-profits policies a large amount of the final figure can come in the form of the terminal bonus.That means a large portion is added on at the end.So when you say would you loose just 7x£3080, i would guess you would loose more.It also depends on how much its grown already.There's quite a lot to it.

Sorry i cant be more exact.

Andrew Timmins

Ian,

With Profits policies are not designed with flexibility in mind, they offer a poor return if cashed in before maturity.

I'm sure if you contact the insurance company they will provide you with information on the current value of your policy. Annual bonuses tend to be quite small and your surrender value will not reflect the true performance of the fund unless you keep it for the full term. The terminal bonus may make up 40-50% of the maturity value. If you possibly can keep the policy for the full 25 years.

Feel free to mail me if you need any assistance

Andrew Timmins
Financial Adviser

tonybooth

Ian

If you go and see an IFA they will tell you that you can present you policy to either a company who buys them direct or auction it. Prices will vary substantially so be careful.

TONY

Tiggs

your company that runs the plan will be able to give you a prediction of its value at maturity- be aware this will be an assumption based on it achiving a variety of different returns- this is all guess work on their part as who knows what returns it will get over the coming years. if you think you know what it'll get then you can see how much the thing will mature at- if you dont have a clue which of the various returns suggeted is more likley then you're not much better off!

likley that it will be somewhere between the middle and higher rates suggested (just my stab in the dark)

if you sell it to anyone it is cause they want to buy it and they wont buy it if they think it will mature at less than they pay you for it so bear that in mind.
if you did cash in (and 7 yrs to go is heck of a lot more than 7 * avarage pa growth) what would you do with the money thats better?

with prof returns are not what they used to be but then if you had a unit linked policy then this year you could have lost 10% plus! instead of getting a 5-6% bonus as you have on your plan.

if it were me and i could afford to keep it going i prob would (unless the company are known to be cr4p- but there arent many of those nowadays)

Tiggs

Ian Griffiths

Thanks all, confirmed what I'd thought. The projected dates are far in the future and it looks like seeing the policy through is the only real choice. Thanks again.