What should I do with my Endowment Policy?
Hi all,
This is a very common question and one I deal with on a regular basis. As ever there isn’t only one set answer. The first thing you need to establish is what type of policy you hold.Is it a With Profits or Unit Linked policy?If it’s a traditional With Profits policy then it can be sold on the open market. Selling it on the open market often means you you can significantly improve on your offer from the Life Company.
This depends on which company you hold your policy with as been taken out with of course. Some companies will perform better than others therefore making them more attractive to potential buyers.
Here are the current top ten, in demand endowment policy companies at the moment…
1. Clerical Medical
2. Scottish Widows
3. Prudential
4. Norwich Union
5. Scottish Amicable
6. General Accident
7. Cooperative
8. Standard Life
9. Friends Provident
10. Commercial Union
A simple way to sell your endowment policy to the highest bidder is by using a trading platform which offers it to the marketplace on your behalf. These trading platforms will place your policy on bid and let you know who has offered the highest bid, usually within 48 hours. It’s a very simple way of selling your endowment policy. We have good long standing connections with several of these companies so if it’s something you are actively considering, then give me a shout.
If selling is not for you then surrendering is your other option. However it is important to consider a few things before you do this:- you should check whether your policy has any guaranteed bonuses attached to it or whether it is currently paying terminal bonuses (bonuses which are paid at maturity). Do also try and get your surrender quotation in writing as companies have been changing these values with increasing regularity recently.
If you do decide to surrender your endowment policy, next you will have to decide what to do with it. You may wish to invest it or decrease your mortgage (if you still have one). The answer as to which option you take largely comes down to your attitude to risk during these turbulent times. Paying off part of your mortgage is usually the least risky option.
Remember too that endowments do often carry a significant amount of life cover, so if you still require this cover you will need to look at replacing it prior to surrender.
Well that’s my word of wisdom for today. I’m off up to Perth to hear the (near) legendary Steve Bee wax lyrical about pensions… I’ll keep you posted!
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