endowment policy UK

Endowment Policy UK
Let an expert assist you to surrender, sell, choose or buy a UK endowment policy. Click below to access our UK endowment policy service:

Sell Your Endowment Policy UK - Real-Time Quotes & Sell your Policy On-line Obtain a NO OBLIGATION instant endowment policy valuation from the UK traded endowment market. Compare it with its surrender value. For further information about the sales process click here. This service is for WITH-PROFIT ENDOWMENT POLICIES ONLY. Unit linked and pension linked policies can not be considered.

Buy Traded Endowment Policy UK
To access an extensive and up-to-date list of traded endowment policies offered for sale in the UK by major dealers call 01225 428444, click on the call me button below or click here to access the enquiry centre.

Endowment Policy UK
Endowment policy has become a dirty word in the UK investment market as a result of the mis-selling of mortgage related endowment policies in the UK from the mid-80's to the late 90s. This mis-selling has, and will continue to, result in the maturity value of many endowment policies being insufficient to repay the mortgage that they were designed to cover leaving millions of homeowners with an unexpected shortfall. The shortfall was caused largely by advisors using unrealistically optimistic assumptions when calculating the future growth in value.

This history should not, however, entirely detract from the potential value of endowment policies which, used properly and sensibly, can sometimes help to provide a solid base to an investment portfolio. For many people, an endowment policy may still be an attractive option either as a stand alone investment or to facilitate the repayment of an interest-only mortgage.

However, an endowment policy is a packaged product including both an investment element and a life insurance element. It is possible to buy these two elements separately and this should be considered as an alternative to purchasing an endowment. Most recently, for example, insurance companies administrative costs have usually been higher than certain other investment vehicles and it may be more efficient to buy a term life insurance product along with, say, a ISA savings product. As an investment product a second hand endowment policy may be attractive as the higher upfront costs have already been incurred before you acquire.

A UK 'With-Profits' endowment policy has a guaranteed payout (or "sum assured") at inception. Each year annual or reversionary bonuses are added. These bonuses, once declared, cannot be taken away. The sum assured and bonuses declared constitute the locked-in value. Finally on maturity, a further bonus known as a 'Terminal Bonus', may be declared. The payout at the end of the endowment policy term is the sum of all bonuses, including any terminal bonus.

The guaranteed locked-in value is one of the main reasons for the continuing popularity of conventional with-profits' endowment policies in the UK. With-profits endowment policies are linked to funds managed by life companies which are usually invested in a broad mix of UK and overseas equities, gilt-edged and other fixed interest securities, and in property. It is important to note that since the annual bonuses depend upon the investment return of the funds, and of the insurance company's view of future performance, the annual bonuses are not guaranteed at the start of the contract and can go down as well as up.

A significant proportion of the value of the policy can be locked-in through the sum assured and annual bonuses, securing a low to medium risk profile. Also, a conventional with-profits UK endowment policy is subject to a process known as "smoothing". Each year bonuses are declared which can not be taken away. Lower levels of bonuses are declared during good economic times to maintain similar bonus declaration levels during weaker investment times thus smoothing out short term fluctuations in investment conditions.

Purchasing a traded with-profits' endowment policy on the UK traded endowment market avoids set up costs since commissions have already been borne by the original policyholder, potentially enhancing the overall rate of return for the investor.

Should an investor wish to realise cash before the policy matures, the UK traded endowment market also offers an alternative to surrendering a with-profits endowment policy. UK investors would be wise to consider this alternative as it is not unusual to raise approximately 10-15% more value by selling the endowment policy rather than surrendering it back to the insurance company.

Endowment policies can also be unit linked. Here insurance companies offer a range of investment funds into which the premium are invested in return for "units" in the fund. You can select the funds but there is no guaranteed sum-assured on performance and their value can fall as well as rise. The return on the investment depends on the performance of the investment funds.

Regular Savings Endowment Policies (sometimes known as "low cost endowments") are most commonly seen as regular savings plans attached to mortgages. With the low cost endowment mortgage, you pay the mortgage provider interest on the mortgage and a regular amount to the insurance provider. This amount is invested in the with-profits or unit-linked funds. If you die within the term, the guaranteed minimum death benefit repays your mortgage. However, at maturity the sum paid out depends on the performance of the funds. There may be sufficient funds to repay your mortgage with perhaps some "profit" returned to you but, if the performance has been below expectation, you may have to top-up the amount received from the endowment policy to repay the mortgage. It is wise to review the funds' performance annually and take early action if performance is below par.

Bonds or Single Premium Endowment Policies are savings plans with typically a small element of life insurance. The premium is usually a single lump sum, used to purchase the life cover but mainly invested to provide an endowment policy with investment returns. You can choose to receive income over the term ("Income Bond") or re-invest for growth ("Growth Bond") or both. At maturity, you receive a return of capital which, depending on investment performance, may be greater or lesser than the original sum invested. There are variations that offer guaranteed levels of income and / or capital at maturity.

Endowment Policies can offer a convenient and disciplined means to save while having some element of life protection cover. Regular payments make administration simple.

For professional assistance and further information about specific investment opportunities call 01225 428444 or click here.

Important: You are welcome to use our on-line facilities to obtain quotes and to sell your endowment policies. However, you will usually get a better deal by speaking to our brokers than you will from an on-line service. Our brokers have access to the latest offers and are waiting to get you the best prices. Complete an enquiry form or pick up the telephone and a broker will do the rest. It's Free to you!