I have found several advertisements in national papers recently
from companies selling endowment policies. However, which is the best
option to get the best return if you want to sell your endowment policy?
It is estimated that over 4 million with-profits endowment policies were sold by insurance companies in the nineteen eighties and nineties. These policies were designed to last for up to 25 years and increase in value each year as a bonus is added to the amount of money that you paid in every month plus an estimated big bonus at the end of the term. Most of these policies were estimated on annual bonuses accruing at up to 9%, however in reality, with the fall in interest rates over the last 10 years, most policies are currently returning less than 1% per year.
These with-profits policies were sold as a means to repay an interest only mortgage at the end of the mortgage period. Industry experts now predict that 9 out of 10 policies will not reach their target figure to repay the mortgage. With nearly 4 million policy holders having been informed by their insurance companies of the potential endowment shortfall, there is a big market out there for Traded Endowment Policies.
Many people have now made other provisions for paying off their mortgage, like converting them to a repayment type where the monthly payments include both interest and capital. Also the variety of different mortgage deals available now is huge compared to those available in the nineteen eighties and nineties.
Fixed interest term mortgages are becoming more popular nows from one year up to even as much as fifty years are now available and they offer the customer a chance to fix their payments for what ever period of time that they sign up for. This is a great way to protect yourself against rising costs, especially when your income is being squeezed in these times of financial uncertainty across the world. Tracker mortgages are also available which tie in the interest rate that you pay to the bank lending rate. This especially helped me to get a great deal when interest rates were falling.
So what do you do with your old, unwanted and outdated endowment policy?
Selling endowment policies may give you a better return than just to cash in or surrender your endowment policy. However you may want to replace the life insurance component with a more suitable product.
It is estimated that over 4 million with-profits endowment policies were sold by insurance companies in the nineteen eighties and nineties. These policies were designed to last for up to 25 years and increase in value each year as a bonus is added to the amount of money that you paid in every month plus an estimated big bonus at the end of the term. Most of these policies were estimated on annual bonuses accruing at up to 9%, however in reality, with the fall in interest rates over the last 10 years, most policies are currently returning less than 1% per year.
These with-profits policies were sold as a means to repay an interest only mortgage at the end of the mortgage period. Industry experts now predict that 9 out of 10 policies will not reach their target figure to repay the mortgage. With nearly 4 million policy holders having been informed by their insurance companies of the potential endowment shortfall, there is a big market out there for Traded Endowment Policies.
Many people have now made other provisions for paying off their mortgage, like converting them to a repayment type where the monthly payments include both interest and capital. Also the variety of different mortgage deals available now is huge compared to those available in the nineteen eighties and nineties.
Fixed interest term mortgages are becoming more popular nows from one year up to even as much as fifty years are now available and they offer the customer a chance to fix their payments for what ever period of time that they sign up for. This is a great way to protect yourself against rising costs, especially when your income is being squeezed in these times of financial uncertainty across the world. Tracker mortgages are also available which tie in the interest rate that you pay to the bank lending rate. This especially helped me to get a great deal when interest rates were falling.
So what do you do with your old, unwanted and outdated endowment policy?
Selling endowment policies may give you a better return than just to cash in or surrender your endowment policy. However you may want to replace the life insurance component with a more suitable product.
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