There are many
reasons for surrendering your endowment policy, but trading your policy, rather than surrendering it to your life assurance
company, could prove to be more beneficial.
With-profit endowment policies are long-term
investment products and have been designed to be held through to maturity.
If you surrender your policy, it is the life office who takes it over.
They will then pay you a surrender value for it. If you trade it in, you
sell the policy to a third party, usually through a traded endowment
company..
The new owner would then take over the policy and pay the premiums.
However, the assurance remains on the life of the original policyholder,
so when it matures or if the original policy holder dies, the new owner
gets the money.
The reality is that a better surrender value can be
realised if the policy is sold through the traded endowment market. The difference between the
value offered by the assurance company and the traded endowment market
is on average, about 15%, but valuations as high as 35% better have been
achieved.
Of course the value of a policy is dependent on a range of factors, and
you should always seek advice about surrendering you endowment policy.
