Selling an endowment is an excellent alternative to surrender

Did you know that the endowment resale industry has grown massively in the past decade or so? Buying an endowment policy means high-value investment opportunity for anyone seeking high return on their money (the buyer) and for anyone who wants to raise cash by parting with an endowment (the seller) it means a much higher return than simply surrendering it to the life office concerned, making it paid up or borrowing against it.

To sell an endowment is a win-win situation for both the buyer and the seller. The only other element left in the equation is to find all the information you require about traded endowment policies and this you can easily do by taking a look at a reputable online endowment trading company that can offer online quotes.

Online firms such as Best Price Endowment specialize in UK traded endowment policy. They buy policies directly from the public as well as from IFAs. Their toll free number in UK is 08701 287 333. You are able to obtain a quote online or by telephoning them. They deal in endowments from all the reputable insurance companies: Standard Life, Norwich Union, Axa, Prudential and CIS.

You should bear in mind that endowments which are due to mature in 2022 and 2023 are highly in demand, so much so that you can demand a premium for them. The whole endowment sale versus surrender option is something you should seriously investigate if you want to raise cash in a hurry for any purpose (holiday, education, emergency) because you can get as much as 40% more by selling your endowment policy than surrendering it., making it paid up (meaning no further premiums are payable on the policy but reduced benefits will be received at maturity or on death) or borrowing against the policy.

Interest Only Mortgage and Endowments

When you decide to buy your dream home, the first word that pops up in your mind is ‘Mortgage’. As a prospective shopper your curiosity about how to repay the loan is quite common. There are two avenues to pay off your mortgage, let’s go through the following mortgage types:

  1. Repayment Mortgage: Under this process, your monthly premium combines interest and a part of your debt. You repay the loan in full in due course of time.
  2. Interest Only Mortgage: In Interest Only Mortgage (IOM), you need to pay the interest on your debt only. The principal is not paid and stays as it is. You have to pay the principal amount in full at the end of the process.

IOM can be secured with an endowment policy. With profit endowment policies return you a lump sum on maturity and the amount is likely to meet your home loan amount. By investing your money in a traditional with profit endowment policy you are assured to get a certain amount when the policy matures. It often entitles you for reversionary bonus and a non-guaranteed bonus at the end. The bonus amount is influenced by stock market performance.

Hence, with a with profit endowment you can get more than what you expected and that is the reason, you should do some research before you surrender endowments if any emergency arises. You can always sell endowments in the second hand market. By selling endowment policy you can get an amount often higher than the surrender value.

The value of a traded endowment policy depends on various factors like the present condition of the policy, how far is it from maturity, is any premium is due or not, the stock value and many more. If the situation goes in your favor, you can get a huge amount by selling endowment policies. On the other hand, the surrender value hardly equals to the accumulated amount of premiums paid.

If you ever feel that your endowment will not be able to satisfy your Interest Only Mortgage, sell it out. Contact an authorized IFA to know your options.