Is selling my endowment a good idea?
Before selling endowments, think about why you need the money.
Some people choose to sell their endowments if the growth rate is poor. This means they have not been able to save the amount they wanted to. But if growth rates might improve selling might not be wise.
Other times, people find themselves in difficult circumstances. These can mean they need to urgently spend the amount they have saved so far and stop paying premiums.
For example, people sell their endowments to clear a mortgage, switch their investments to stocks, pay off large debts, and in some cases simply to gift it to somebody else. But,remember, you might lose out financially if you sell.
It is important to make careful comparisons between the potential buyers of your policy. It can be a good idea to seek guidance before choosing a buyer of your endowment life insurance.
Buyers rarely give financial advice.This is why independent advice should be sought before selling your endowments.
How can I find out the value of my existing policy?
Normally providers send an annual statement. This statement gives a summary of policy value and the performance of any investments.
So, this allows you to keep track of your savings annually.
If you want to know the value mid-year, contact your provider to find out. When you call up the office, be sure to have your policy number.
Are there alternatives to selling the endowment policy?
Sometimes people find they cannot afford their policy payments. They might want to sell, in order to get rid of this consumer credit.
However, other options are out there and might be better. Sometimes, lenders let you keep the policy but stop making payments towards it.
This is good if you simply can’t afford the premiums but do not need the savings yet. This is because no savings are paid into your bank until the policy ends.
If you go for this option, check the terms carefully. This is because life policies can sometimes become void when you stop paying premiums.
The other option you have is to surrender. The endowment life insurance provider gives a lump sum as soon as the surrender is complete. No more premiums will need to be paid, either.
However, this often involves charges and penalties. One of the fees you may encounter is a surrender fee. Check the exact amount of this before cancelling.
Should I get an endowment policy?
Some people have large savings goals or debts to pay off in the future. One example people often give is wanting to pay off their mortgage.
An endowment policy can be a good investment in helping someone achieve these goals, whilst at the same time giving life insurance cover.
As some of the types of policies involve investments, they can be attractive to people that do not mind taking a risk. This is because the exact total they will receive at the end depends on the performance of the investment. It could go up, giving you a bonus. But, it could also go down.
Who are the best providers?
Online guides can help you choose a provider, and there are a number out there. Even if you consult these, you should discuss the plan and your options with an independent adviser.
Most people buy their policy directly from a life assurance company. Three examples of popular providers for endowment policies (UK) are Aviva, Canada Life and LVE.