Endowment Investment TV

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The general view of investing in Endowment Policy



Endowment Policy

The endowment policy is a type of life insurance policy that designed to pay a lump sum at a certain time or if the person dies an endowment policy may mature at ten, fifteen, or twenty years and some of these policies may also provide money if there is a serious illness. Endowment policies are generally the traditional with-profits or unit-linked and with unitised with-profits funds.


Surrender Value and Adjusted Market Value

Endowments can sometimes be chased early or surrendered early and the policy holder receives the amount of the surrender value determined by the insurance company. How much is received is going to depend on how long the endowment policy has been in effect and the amount paid in to it. Under bad investment conditions the encashment or surrender value may be reduced by a market value adjuster to squeeze out some cash during the time when investment conditions are not good and this means the investor will received only the surrender value minus the adjusted market value.

Endowment policy cash could be used to cover inflation for retirees


Publication date 26/05/2010

There has been much news coverage recently of the rising cost of living, with inflation remaining above the Bank of England's target figure.

People in their post-work years are said to be among the worst affected at present by such hikes.

Indeed, the latest research from MGM Advantage suggested that retired households are seeing their expenditure go up significantly.

Chris Radford, chief executive officer of aap, the UK's biggest buyer of endowment policies, said some of its older customers who were finding it difficult to cope with increasing inflation had decided to sell their underperforming endowment policies to provide them with additional money

Are your living costs rising?

MGM Advantage revealed that the cost of living for homes in which the earners are over the age of retirement will rise by hundreds of pounds per year as a result of the latest annual increase in the consumer price index.

The measure has climbed by 3.7 per cent year-on-year, it noted.

According to the firm, people aged 65-74 need to find £800 more on average over a 12-month period to keep their standard of living the same.

Sales and marketing director at MGM Advantage Aston Goodey said: "Inflation is a real menace and it is pushing up the cost of living. This is particularly difficult for retired households where they often have fixed incomes."

Recently, Tom McPhail, head of pensions research at Hargreaves Lansdown, stated that the government may be forced to implement new laws which raise the age at which people can cease to work so that there is sufficient funding available.

Selling endowments could help cover inflation increases

Surrendering your endowment policy to the life office that sold it to you should be the very last option you consider, Why? Because endowment selling could be worth a lot more through aap,  the UK's biggest buyer. Life companies are now obligated to inform you that you have a selling alternative if you are considering surrendering your endowment policy, and aap works very closely with them to ensure that the process goes through as smoothly as possible. Endowment selling allows you to transfer your endowment to a new institutional owner who will maintain it until it matures. The process is simple and trouble free, and aap will take care of all the legal paperwork free of charge. We can even contact your life company on your behalf and obtain all the information we need if you don't have it to hand.


To see how much you could receive by selling your endowment policies through aap, just fill in a few details using the form above. The most important factors when deciding if you can sell your endowment policy are:

  • The life company that issued the endowment policy
  • Is it a with-profits policy?
  • The length of time that you have held the policy
  • The surrender value you have been quoted by your life company


Mr Radford, from aap, said some of its customers who were concerned they could not cope with inflation had decided to sell their unwanted endowment policies to provide them with additional money.

He added that should aap make an offer to purchase an endowment policy, it will always pay more than the surrender value offered by the insurance company.

From aap.co.uk