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.
Article from the
Fair Investment Company
If you have an endowment policy and it is not on track to pay your mortgage or has a projected shortfall, you can get an independent endowment review to help you understand the options available to you.
As a result of volatile stock market conditions over the past decade, many endowment policies taken out in the 1980s and 1990s are unlikely to pay out the amounts originally estimated.
If you took out the endowment to pay off a mortgage liability the endowment may not pay out enough to do so.
You should have been receiving letters over the last few years from your endowment provider telling you:
If your endowment policy is still on track to pay off your mortgage at the end of the term;
the amount of projected shortfall, if any
the options open to you
what further action you need to take
You may also have received an endowment surrender value from your provider.
If you have an endowment and need advice about the options available to you, or you are intending to surrender the policy, you should get independent advice.
