Should i sell endowment

As such, this leaves resale policyholders in a bit of a vulnerable state. This article was first published in SingSaver. Marissa Saini. Jan 04, Money Savings Personal finance. Your daily good stuff - AsiaOne stories delivered straight to your inbox. By signing up, you agree to our Privacy policy. Endowments usually mature after between 10 and 25 years. If you took it out with a mortgage, it should finish at the same time as your mortgage.

Your statement should tell you how much the endowment is likely to pay out when it matures. It may also give the surrender value , which is the amount your provider pays you if you cancel the policy. But this amount is likely to have changed since your statement was sent, so ask your provider to confirm the current surrender value. You have to give the surrender value and date when you sell your endowment to another company. Most companies only accept this if the date is within the last 30 days.

The companies that buy endowments have rules about the types of policy they accept. For example, they might only buy with profit policies with:. You can sell your endowment on the TEP market using a traded endowment specialist. This is a company that buys endowments to sell on to another investor. You can use our comparison to find the best deal when you sell your endowment. Select the company that sold you your endowment and enter the details of your policy.

You will then get quotes from traded endowment specialists. These quotes let you know how much they can pay you for your policy. The offers expire after a set time, e. What information you do you need to give? Compare the amount offered by each company to the surrender value your original provider gave you. Some TEP companies may increase their offer if you let them know another company offered you more.

Make sure the quotes are more than the surrender value, and check which one that gives you the most money for your endowment. You can then decide if you should sell your endowment to the endowment specialist. How much does it cost to sell?

Let the company know you have accepted their offer and send back any paperwork they request. They then contact your policy provider to transfer your endowment.

You will be paid by cheque or bank transfer once they have completed the paperwork and the policy is no longer in your name. Your TEP buyer will let you know the date you can stop making monthly payments to your endowment policy.

These can be cashed in using the investor's annual capital gains allowance, allowing the proceeds to be received tax-free. One problem in terms of long-term planning is that if the original policyholder dies, the policy matures immediately. However, in most cases, the policy simply runs to maturity at a known date. There are also some smaller market makers not regulated by the FSA, who trade through independent financial advisers for compliance purposes. Market makers claim that current demand for Teps considerably exceeds supply.

They are confident that the expected huge flow of Standard Life policies can easily be absorbed, although a really large volume of extra sellers might result in a drop in the premium paid above the surrender value.

The ratio of premium to surrender value varies considerably according to the size of the accumulated "lock in" value, the length of the policy until maturity, and the status of the insurance company.

The highest premiums are paid for policies with 10 to 15 years to run before maturity. Some market makers will only buy policies if they have a matching buyer. Others like to build up large portfolios of policies, providing a choice for potential buyers. All of them may turn their noses up at policies from insurance companies who are financially weak and may fail to provide a decent return.

However, that is not the case with Standard Life, whose policies in the past have often earned an extra premium on the secondhand market. It is definitely worth looking around for competitive offers because some market makers may have lots of potential buyers prepared to pay higher prices. Names of the different market makers can be easily obtained via the internet.