Expired

THANKS endowment policy EXPIRED

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Found 12th Jul 2008
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Thanks for the input!

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Banned

Assuming 8% growth is probably quite an assumption! Though with just 2 years to go and the final lump on maturity, I'd probably be more tempted to wait than cash in. I'm in a similar position. I have 3 that mature in 2013.

But as you know, anything can happen in the next two years. It really is a gamble and I honestly dont think a financial advisor would be able to give you any better info on what is likely to happen than you could deduce youself.

Personally, I'd take the gamble (as I am myself).

Original Poster

Yes, thanks guv. That's my basic feeling too. It's only because I have to borrow that I'm even considering it. The illustrated maturity value doesn't take into account terminal bonus, right?

so in 20 years u make a profit of around 7k assuming 4%?

Banned

but endownment policies do not fall in value do they? they just have yearly profits, if any, added to them. So a market crash would not lower the current value of the policy.

also, I think you will be liable for some tax if you surrender it early. Not to mention you forfeit the possible terminal bonus

Can't you just use a 0% credit card

If you need the cash now, rather than surrender the policy to the issuer you could look to sell it on to a third party. That way you might get more than the surrender value. Try Googling "selling endowment policy".

Original Poster

muffin247;2512559

so in 20 years u make a profit of around 7k assuming 4%?



Sorry, not sure what you mean or how you calculate 'profit' in that 7k figure - it's complicated by real cost of money and lost interest elsewhere etc. Plus the illustrated value doesn't take into account the terminal bonus afaik (need to check with SW), which I'm guessing could be anything from £1k to £6k depending on lots of things. Like I said, it's a gamble and you have little access to details about how they are investing your money. At times in the past this policy performed really well with estimated maturity values way above the current one, then it hit a really bad patch and plummeted. The last few years have seen good growth again but because of the current market downturn I'm worried that the next two years will produce nothing, in which case the only thing to add to the current surrender value (approx) would be the terminal bonus.

Evil_monkey;2512591

If you need the cash now, rather than surrender the policy to the issuer … If you need the cash now, rather than surrender the policy to the issuer you could look to sell it on to a third party. That way you might get more than the surrender value. Try Googling "selling endowment policy".



already done that as put in the OP - no interest from any of the market makers... which also worries me!

Liddle ol' me;2512611

already done that as put in the OP - no interest from any of the market … already done that as put in the OP - no interest from any of the market makers... which also worries me!



Oops. Must read posts properly. :oops:

What is the current value of the policy Ie final value and bonuses already received. I wuldn't worry about any 3rd parties not buying it they tend to be interested in policies with only a very short term left to run. I would not take the assumption of a 4% increase as well let alone a 8% increase. The bonuses you have already earnt are safe and cannor devalue. I wouldn;t expect too much from the final benefit.

A lot depends on what payment tems you want you're £6000 loan on and how much APR you have to pay

Banned

Google found this on the tax that may be due:-

If you are the original policy holders (most likely), any tax liability will be to Income Tax not CGT, if the surrender is a Chargeable Event. The Life Insurance Company should issue a Chargeable Event Certificate containing all the relevant details.

However, if the policy is a qualifying one, and if it has been in force over 10 years, means it should be exempt from tax.

If there is an Income Tax liability, it is only on the profit (if you are lucky to make a profit), which is the excess of the SV (Surrender Value) over the premiums paid. The maximum rate is 20%, and only applies to HR taxpayers (or those who become so by adding the relevant gain to their income for the appropriate tax year. Top Slicing Relief may prevent/reduce any liability.

If in doubt, I suggest you consult your Endowment issuer to confirm that the surrender is exempt from tax.

Original Poster

csiman;2512576

but endownment policies do not fall in value do they? they just have … but endownment policies do not fall in value do they? they just have yearly profits, if any, added to them. So a market crash would not lower the current value of the policy.also, I think you will be liable for some tax if you surrender it early. Not to mention you forfeit the possible terminal bonusCan't you just use a 0% credit card



Sorry, missed your post. Don't think it's taxable but will check this of course.

"You may have tax to pay on a life insurance policy if it is 'non-qualifying'. Most regular premium life insurance policies, such as whole life or endowment policies are 'qualifying' and therefore not taxable providing you have kept the policy going for at least ten years (or three-quarters of the term if less). Non-qualifying policies are usually either regular-premium policies which you have cashed in early or single-premium bonds. [...] startups.co.uk/667…tml

As for fall of value, I'm only talking in real terms (i.e. if it doesn't increase and the terminal bonus therefore comes to very little) especially because I will need to borrow. The credit card option is not available to me unfortunately...

Original Poster

Hah - I was writing my post above and found your new one once I submitted it!!
thanks csiman!

Original Poster

newbie1001;2512705

What is the current value of the policy Ie final value and bonuses … What is the current value of the policy Ie final value and bonuses already received. I wuldn't worry about any 3rd parties not buying it they tend to be interested in policies with only a very short term left to run. I would not take the assumption of a 4% increase as well let alone a 8% increase. The bonuses you have already earnt are safe and cannor devalue. I wouldn;t expect too much from the final benefit.A lot depends on what payment tems you want you're £6000 loan on and how much APR you have to pay



Thanks for this. I think we are like minds on this. Yes, I'll look at the loan options available and then make a decision based on assumption of no increase over the next two years and minimal terminal bonus. SW say little about this so I'm in the dark as to what to expect on this. Bit frustrating, as all things considered it's the major variable.

Rep added to you and other helpful comments :thumbsup:
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