anyone good on projections and maths, best thing to do ?

There are difficulties in the way of giving you the advice that you seek. One has to be duly authorised to give such advice, for just one thing.

I would observe that the 13k is NOT what you would get if you cashed it in now - you need to ask for a surrender value.

Assuming £7 of the £33 is for term life insurance, monthly investments of £26 in the stock market would have grown to ~£13,120 by now. [1]

Here's the basics from the regulator, the Financial Services Authority (FSA) -

Here's the link mentioned by the FSA to the Association of Policy Market Makers who circulate your details to their members to give you quotes. It seems like a good system -

Terminal benefits are just esitimates as far as I'm concerned.

What to do with it really depends upon whether there's an MVA.

Info. in life insurance -

By all means get *independent* financial advice, but due to the amount of mis-selling post the recommendations here for a double check first.

There's a good forum here, and a search on 'Phoenix' reveals some discussions which may prove useful. I'd post there as well -

Daytona

Interesting observation, that (needing to be authorised). If any authorised individual gave what might be deemed to be advice on a NG he'd probably be censured. for it. He'd need to know basic things like date of birth, marital status, attitude to risk, income, etc etc. Most people who respond to questions don't know these things. I imagine that the regulator (FSA) turns a blind eye to this, otherwise the world wouldn't go round.

I wonder whether anyone who has been given advice here would take the adviser to court if it turned out to be wrong. We should remember that anyone asking for advice is (a) not paying for it (b) doesn't know how knowledgeable the adviser is. So he has to take his own life is his own hands, so to speak.

Rob Graham

Quite so, it is an utterly false observation. There is no way anyone can be prohibited from giving (free) advice of any kind on any matter to any person, ever (at all at all, as the Irish say). :-)

Regulation, authorisation, and indemnity issues only arise when the advice is given in exchange for payment.

I doubt that very much.

Perhaps, sometimes, but not necessarily.

Agreed, but, you know, most people who *ask* the questions don't know either. Well, OK, most people do know their date of birth and marital status and income (but not necessarily their future marital status and income), but attitude to risk is not so easy to pin down.

Attitude to risk might come into the picture when someone is deciding whether to start an endowment-style investment plan at all, and if so then which one. Attitude to risk is perhaps less important where the plan is already in place, and has been for 20 years, and the question now is whether it's better to let it run another 5 years to term or to cash it in, sell it, or make it paid-up.

Exactly. The basis for taking someone to court for wrong advice would be a civil action for damages, and proof that the adviser owed the enquirer a duty of care would hinge on whether there was a contract in force under the terms of which the advice was given. In the absence of consideration (the enquirer paying the adviser for the advice) there is no contract.

The question our Anne seems to be asking is merely what the likeliest projected financial outcomes of her four options are. The maths is straightforward, the problem is that the numbers one needs to plug into the process are for the most part guesswork.

AIUI, it is the practice of endowment companies to operate with rather a lot of smoke and mirrors, by avoiding putting a definitive value on an investor's account, and instead applying a host of bonuses, many of which are discretionary. Typically a terminal bonus would be reduced if the policy is cancelled prior to maturity, and this is why one can often get more by selling it than by surrendering it (because the purchaser will then get the benefit of the terminal bonus). Generally terminal bonus will not be lost when a policy is made paid-up (which is what Anne has called "freezing" it, i.e. stopping payment of premiums, so that only the existing value locked into the plan is left to grow, but this value will not be boosted by the added value of the investment element of future premiums).

No doubt Anne will have had the letters warning her that there is a low/moderate/high risk that her endowment's maturity payout will fall significantly short of the sum needed to repay her mortgage. Presumably she already has either made alternative arrangements to repay it or even has already repaid it, so the only issue now is maximising what she can get out of it.

My own instinct is that with only 5 years to run, it's probably not worth changing anything so late in the day. That means don't surrender and don't sell. It's probably not even worth making it paid-up.

In my own case the decision is more difficult because it has a bit longer to run (10 years) and, though there isn't much to choose between the mid projected maturity value and what I'd get by investing the surrender value and future premiums elsewhere (even in cash savings) for 10 years, there is always the possibility that in a 10-year time frame markets may improve to the extent that the maturity value would be much better. In addition, there's the complication of Nonstandard Death's "Mortgage Endowment Promise" which holds out the prospect (however slim) of a top-up payment to reduce any shortfall, but the promise is withdrawn in the even that the policy is made paid-up or is even partially sold or surrendered.