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Selling Endowment Policy
Selling an endowment policy is a financial decision that requires proper thought. The market value and surrender value of traded endowments can go up as well as down. It is wise to seek independent financial and tax advice before selling your endowment policy. If you are unsure whether you should be selling your endowment policy let a regulated financial advisor assist you.
Selling endowment policy Request advice
Call 01225 428444 or click here to access the enquiry centre.
Selling your endowment policy through Astute gives NO OBLIGATION valuations and access to the top offers from several major buyers. You can submit your policy details on-line if you click here.
For further information about the process of selling an endowment policy click here.
This service is for WITH-PROFIT ENDOWMENT POLICIES ONLY. Unit linked and pension linked policies can not be considered.
Important Note: Our on-line facilities allows you to obtain quotes and to sell your endowment policies. However, by talking to a regulated intermediary you will usually get a better price than you will from an on-line service. We have access to the latest offers and are waiting to get you the best prices.
Selling your endowment policy will reduce the amount of life insurance you have. If you wish to consider how best to replace this lost cover click here. You may also need advice on how best to use the sales proceeds. If so, we can help click here.
Selling Endowment Policy
There are many reasons why you may wish to cash in the value of your endowment policy. You may, for example, be dissatisfied with its performance; you may be re-mortgaging; you may no longer be able to afford the premiums; or you may simply need the cash. Whatever your reason it is worth considering selling your endowment policy in the traded endowments market. Selling an endowment policy on the traded endowments market usually results in better value than dealing directly with the life company.
Selling an endowment policy will usually yield a price 10%-15% higher (and sometimes more) than the surrender value (i.e. the price which the insurance company will pay to buy back the policy before maturity). This is because charges will have been deducted at the outset and the surrender value is unlikely to include any element of the terminal bonus which is payable on maturity and may constitute up to 60% of the payout on maturity.
Not all endowments, however, can be sold. You can normally only sell with-profits endowment policies. Unit linked policies and those linked to pension plans can not normally be sold on the traded endowment market
Although the traded endowment market does not set a minimum surrender value or minimum term, you are unlikely to find a buyer unless your policy has been in force for at least 5 years, or a third of the policy term. Also, most investors will only be interested if it has a surrender value of at least £1,500 to 2,000.
Selling your endowment policy will involve it being legally assigned to a new investor for a cash sum. The life assurance element of the policy is not transferred. This means that the policy will remain on your life (i.e. it will pay out on your death). The new investor will take over your obligation to pay the premiums until the maturity date or your death, which ever is earlier, and will benefit from the future value of the policy.
There are other options you may also wish to consider before surrendering or selling your endowment policy depending upon your circumstance. For example, if you can't afford to pay the premiums, you can make the policy "paid up", which means you stop contributing and you will still receive a payout at maturity based on the limited contributions you have made.
It is also possible to borrow against an endowment policy if you need the cash but this is typically at uncompetitive rates of 9%-10%, so you may well be better off extending your mortgage. If you wish to consider increasing your mortgage as alternative to raising cash against your endowment click here.
As always it is wise to seek investment advice if you are selling endowment policies. Working with the right advisor is essential for you to maximise your investment returns. To contact a Financial Services Authority (FSA) qualified advisor complete an enquiry form or call 01225 428444.
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