Endowments in the crunch...

Are they with profits endowments, or unit linked? If the former, there may well be an MVR (market value reducer) applied while markets are down. This is likely to be removed when things improve. If unit linked, then your guess is as good as anyone else's.

But you've not really provided enough info. Who is the insurer? What fund? How long is the term? How much left to go? At what assumed growth rate was the prediction you mention?

Rob Graham

Rob Graham

All three are unit linked I believe.

I didn't go into great details as it was more of a general question - but since you ask:

- two of the policies are with Friends Provident and one with XXX. Not sure what funds without digging through boxes of papers - they were 'medium/low risk' IIRC.

- two of them only have four/five years to go, the other has 12, all were originally 25 year policies.

- the calculation I did for whether they would cover the premiums if I kept them up was based on the highest prediction rate - 8% I think. So best case. I know it *could* do better than that, but it didn't while interest rates were 8% plus so I can't see it doing it now.

Doh. XXX = Norwich Union. I sent it before looking it up...

One of the Friends Provident policies was originally with London & Manchester, if that makes any difference.

Like I said, what I'm really after is whether the surrender value they already told me can go down as well as up - I'm 99% sure they aren't worth keeping, it's a case of when to surrender them. I'm assuming the market for selling them on is a little flat right now.. but I could be wrong.

Hi there, I think that you have made a right decision, and you should surrender it ASAP. Even if you keep making the Premium payments for the coming days for the market to improve, i think the total cost would be more than the then value of Endowments.

All the best.......... Regards

Although this may be right, you can't KNOW this. It's just a hunch. What do you base this opinion on?

Rob

Yes, it can if they are unit-linked. If they are with profits then probably not, apart from the application of an MVR, which would turn a no into a yes!

Rob

"robgraham" wrote

Or a reduction of terminal/final bonus?

To be fair to him, nobody *knows* either way, really. And he does say 'I think' twice...

Thanks for all the advice to everybody, I'll get some updated surrender values and take it from there

The question really is, if you had the money in cash, would you put it in these investments? Probably not, so you should cash them in.

Yes, the value can go down from what it was 6 months ago, and it probably has. As for what they will do in the future, anyone who is telling the truth will tell you that they don't know what will happen. Anything people know about is already priced in.

Don't you lose a lot if you cash in an Endowment policy early because (a lot) of the bonus is applied right at the end?