MyFinances.co.uk
News feeds Free newsletter

All the latest personal finance news - helping you make the most of your money

Mortgage guide
Is it a good idea to surrender your endowment policy?

  • Endowment mortgages

    Endowment mortgages see monthly repayments not paying off what you have borrowed, but just the interest of the loan. More...

Surrendering your endowment policy

The vast majority of endowment mortgage providers allow the policy holder to "surrender" their policy.

This allows you terminate your policy early in return for a certain amount of money - the "surrender value".

However, surrendering your policy often comes at a cost - with how much you receive depending on how long the policy has been running when it is cashed in, the current state of the markets, and the policies of the endowment company.

Fundamentally, endowment policies are long-term investments and cashing them in early generally means getting a poor return.

However, instead of taking the surrender value, policy holders can sell their endowment on the open market.

This means another investor will take over responsibility for making premium payments and will receive the pay out on maturity in exchange for an up-front sum.

Typically, if you sell your endowment policy on the open market you will receive more money than if you simply surrender it.

You can obtain a quote as to how much the endowment policy would be worth if sold on the open market instantly, for free, and with no obligation to sell.

How much the policy is worth is generally based on the policy age, which company issued it, how much has been paid in, and other basic details.


Recommended ... 


Disclaimer:
myfinances.co.uk is not authorised to give advice under the Financial Services and Markets Act 2000.

Terms:
By using this site, you are deemed to have accepted our terms of use.

About Us | Advertise | Contact Us | Privacy
© 2004 - 2008 www.myfinances.co.uk

myfinances poll 

Is the current account market working for you? myfinances.co.uk is running a poll to get your thoughts on how your day-to-day banking is going.