A friend had asked me about a endowment plan. Whilst a fairly knowledgeable about investement (shares etc) - I have never studies endowments in detail. Can anyone help me out?
The plan is 10 years, contributing 5 per week, with about 5.5 years to run. Basic sum assured is 2020 with declared bonus to plan aniversary of 163
The illustration states total contribution paid over term of plan 2600, if investments grow by 3% then you would get back 2600, 5% would be 2600, and
7% woudl be 2600.i.e regardless of growth they are showing 2600 - which is the amount paid in! Current redemption value is 550. If the policy is paid up then the "paid up policy amount would be 1040" - but this value isnt guaranteed for the future.
My thoughts......
a) Pointless paying more in if the payout is only the same as the contributions, might as well pay into a savings account and get the interest, b) Pointless surendering as have paid in about 1000 and would only get 550 back. c) Best option to make paid up, pay future contributions to savings account (ING 4.5%) and collect the paid up amount at end of term.
What do others think....