Endowment Surrender: How To Avoid Getting Short-Changed

Endowment surrender allоws yоu tо reclaim somе of the value frоm уоur endowment policy by surrendering it back tо the insurance company that sold it tо you. The amount yоu receive when уоu surrender уоur policy іs оften significantly lesѕ thаn the actual vаlue оf thе policy, but іf уоur personal circumstances mеan thаt you have tо free up some оf the capital уоu’ve invested in thе endowment policy, уou maу feel lіke yоu hаvе nо choice but tо accept thе reduced amount offered by endowment surrender.

Don’t Surrender Your Endowment – Sell It!
Many people who opt for endowment surrender are simply not aware thаt thеre are other options аvаіlablе to them. There is nоw а legal requirement for insurance companies to notify customers thаt endowment surrender іs not thе only way to recover vаluе frоm thеir policy.

When you sell уour endowment yоu cоuld receive uр tо 35% more thаn thе endowment surrender value of уour policy. Provided уour endowment іѕ a sufficiently mature with-profits endowment policy, finding а buyer for your endowment policy is simple.

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Selling endowment policies

selling endowment policies

I have found several advertisements in national papers recently from companies selling endowment policies. However, which is the best option to get the best return if you want to sell your endowment policy?

It is estimated that over 4 million with-profits endowment policies were sold by insurance companies in the nineteen eighties and nineties. These policies were designed to last for up to 25 years and increase in value each year as a bonus is added to the amount of money that you paid in every month plus an estimated big bonus at the end of the term. Most of these policies were estimated on annual bonuses accruing at up to 9%, however in reality, with the fall in interest rates over the last 10 years, most policies are currently returning less than 1% per year.

These with-profits policies were sold as a means to repay an interest only mortgage at the end of the mortgage period. Industry experts now predict that 9 out of 10 policies will not reach their target figure to repay the mortgage. With nearly 4 million policy holders having been informed by their insurance companies of the potential endowment shortfall, there is a big market out there for Traded Endowment Policies.

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Popular endowment policies now have

popular endowment policies now have

Are you tired of paying for an endowment policy which you now fear may never pay off your mortgage? Would you be better off walking away? In this article I want to look at the options that people with the once popular endowment policies now have.

Back in the 1980′s endowment policies were seen as low-cost and low-risk ways of saving for your retirement. Unfortunately the reality has been a little different from that which was promised by the keen insurance agents who promoted the policies to British home-owners at the time.

An endowment policy is a combination of life insurance and stock investment all backed by a mortgage against your home. Typically the policy owner has an interest-only mortgage against the property and the capital is invested into managed funds or the stock market. The gains of the market were supposed to pay off the home mortgage at the end of the policy’s term – usually 25 years.

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Endowment policy is a type of life insurance policy

endowment policy is a type of life insurance policy

Life insurance is a virtual staple of Western financial planning, where the rising costs of college education, unpredictably fluctuating mortgages, and a plethora of other social considerations can leave parents scurrying frantically for some kind of security for their offspring. Just 20 or so years ago, the endowment policy was en vogue, and sought to quell these many fears. Why, then, have they declined in recent years (although it is important to note, more so in the U.S. than in the U.K., where procurement of such policies is still going fairly strong)? Clearly, they have some value as an investment vehicle, due to their rising popularity in India, Malaysia and a few other places, which tells us that they are an inherently worthwhile investment to investigate.

First of all, be aware that an endowment policy is a type of life insurance policy, after all. Just like life insurance, it can have a principal, or total, value of $250,000 (for example). However, unlike the term policy and whole life policy, the actual buyer can ultimately get this principal; basically, the difference is that you don’t have to die in order for the money to be paid out. While this is beneficial to the policy holder, it might not quite be all that useful to her family, which explains the decline of endowment policies in general – in part.

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Endowments selling can be overwhelming

Selling your endowment policy is undoubtedly a big decision. Surrendering your endowment policy is serious business. It makes sense to consult an independent financial advisor. He will help you compare offers and make a well informed decision. He will make sure you get the most for your policy. Rest assured that you will achieve the best possible price. The fee would be well worth your time and energy. When it comes to endowments selling, it is imperative to check your policy. Ensure that there is some value in selling endowment. In other words, you need to consider the advantages and pitfalls when you decide to sell your endowment. For the uninitiated, an endowment policy is a life insurance contract. It involves paying a lump sum after a specific term or on earlier death. Usually maturities are ten, fifteen or twenty years up to a particular age limit. A few policies also pay out in the event of critical illness. Policies are unit-linked or with-profits.

Endowments selling can be overwhelming. If you are looking to sell your endowment, you ought to familiarise yourself with the pros and cons of doing the same. You need to strategically weigh the pros and cons of selling endowments. An endowment policy can be surrendered or cashed in early. The holder is entitled to receive the surrender value. The insurance company determines this value depending on how long the policy has been running and how much has been paid into it. Early redemption can lead to a substantial loss but if you need money, it may be your only resort. When it comes to buying endowment, different companies have different requirements. Mostly the policy needs to be with-profits or a with-profits whole life policy that has been running for a minimum number of years.

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