AF

What was the difference between the value of the endowment 1-2 years before the maturity date and the actual maturity? Did the payment on maturing at least cover the extra payments that would be made to cover (say) the last 18 month?.

Having just received notification of the payout on a 25 year policy with Phoenix (taken out with the Sun Alliance through the Halifax) that quotes 0 terminal bonus I would be very wary about maintaining a policy with this company.

Hi,

Thanks for the tip - I was vaguely aware of the terminal bonus, if not the terminology. I tried a couple of on-line quotes for sale of the endowment, but neither offered any more than the insurance company's surrender value. I'm not sure that Phoenix are offering that much in the way of terminal bonuses at the moment, but as you say, who knows, that may change by 2011.

At the moment, I think I'm now erring towards keeping going to the (hopefully not too bitter) end.

Thanks once again for the tips.

Cheers

Andy

Personally I would keep it going. My dad some years ago asked about the terminal bonus about 2 years ahead of maturity date and was given some general advice about past performance. He kept it going and was glad with the result. But it is a gamble. Depends on how it performs between now and the maturity date. As you say £20 may equate to the life cover, so you are gambling with £37 a month. Will markets pick up between now and 2011? Who knows.

The bold bit below is taken from a guide I found online about with profits endowments and may help. But I suspect you may already be aware of this.

There are two ways growth can be added to a with profits endowment policy. First, every year the insurance company may add a bonus to your policy, know as a “reversionary” bonus as it cannot be taken away. This will be a percentage of the amount of growth made by the with profits fund built up over the previous years. In times of difficult investment conditions there may be very little or no annual bonus added but you will be told the amount in a with profits bonus statement issued once a year.

Then there’s the terminal bonus. This is a separate sum of money that the life assurance company can add to your policy when it matures. Terminal bonus is discretionary and may not be paid at all."

Have you looked into whether you can sell the endowment on the open market rather than surrender. I have read that it is possible to sell endowments for a higher value than can be obtained by surrendering. Do google search for 2nd hand endowment market and enquire for more information on current value.

huckster

I have an endowment with Phoenix, a former Royal Life with-profits policy, taken out in 1986 and which has another 18 months to run. The monthly premium is 57.45 GBP. The target sum is 42k, which of course it's most unlikely to realize. Phoenix have quoted a surrender value of 24k on 02 July 2009, but then dropped that amount to just 22k a week later. They didn't volunteer any info. re. the possibility of profits being added at the very end.

Is it worth me paying another 1k in premiums and hoping that the profits / bonus element added at the end covers this and a bit more than the 22k surrender value currently quoted? I suppose I'll continue to get the life cover (42k) during that period which, at my age, is worth around 20 GBP per month. The minimum sum the endowment is supposed to pay out is just 12k.

Are with-profits endowments of this age, and with this company, attracting any sort of bonus at the moment? Conversely, are there any examples of insurance companies dropping the pay-outs right down to the min. guaranteed sum at the moment?

Any experiences greatly appreciated...