We hear a lot about how endowment policies are not going to deliver what was promised when they were sold in the eighties and nineties. But, nearly always, that sad story is followed by the advice NOT to cahs in your endowment policy.
But what if you have decided that you do want to cash in your endowment policy? And why would anyone buy such an apparently poor investment vehicle?
Before you make the decision to sell, you should check the value of your policy as it stands. Redeeming your policy early will almost certainly end up with you making less money than if you had continued with it for its full term, but to consider cashing in, you will probably a) need the money, and b) have a long time to run on the policy. There is also an argument that says paying into a poorly performing policy could be throwing good money after bad.
If you want to cash your policy in you can surrender it back to the company who you bought it from, or you can sell it to a third party, which can actually get you more money than from the original seller.
Third-party companies have different requirements for buying policies. They usually require iot to be with-profits or with-profits whole life, and to have been running for a minimum number of years. Policies other than with-profits are not so easy to sell as they don’t return the same levels as with-profits. Some also want the surrender value to be a minimum of £1,500.
If you can’t meet such criteria, then all you can do is surrender to the original issuer.
Do remember that stopping making payments or cancelling the policy without doing research and taking the appropriate financial advice is a risk. Stopping payments may negate any life assurance cover that it offered you.
It is sensible to get independent financial advice, for which you may be charged a fee, but could save you time and ultimately get you the best deal.
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