When you sell your endowment you will lose any associated life insurance and forgo any future windfall payments from the Life Office. You may also get less than you would receive if you kept your policy until maturity.
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Thousands of people across the UK have mortgage investments designed to pay off the borrowing on their home and hopefully leave them with a cash windfall too. These investments - known as mortgage endowments - pay out at the end of a set period.
Alternatively, many people combine saving for the future with their life insurance - otherwise known as a life endowment policy. These pay out a fixed amount when the policy matures or when you die, whichever comes first.
So, what happens if you want to cash in your endowment policy early? Selling your endowment ahead of time can cut your losses if you're anticipating a shortfall when it matures, plus give you access to a cash lump sum.
However, in most cases you'll incur penalties and with a mortgage endowment you'll be left with the balance still to pay off. Therefore it's best to consider your options carefully and get professional selling endowments advice.
If you do decide to sell early, this makes getting the best prices selling endowments even more important:
Unitised or unit linked endowments cannot be sold on to second hand investors, so if you hold this type of policy you should seek financial advice. On the other hand, if you have a with profit endowment policy you should have no problem selling it on.
The first thing you should do is contact your policy holder. They'll offer you a non-negotiable surrender value which you can then use as a benchmark for the prices you can get selling endowments policies in the second hand endowments market.
Consider how old your policy is and compare its age to the limits set by other endowment companies. Some companies only purchase endowments over a certain age, so you can quickly cut out any unsuitable buyers.
Next, check the minimum surrender value specified by each potential buyer. Exclude companies that aren't likely to offer you more than that amount.
You should also take into account any fees charged to assess your endowment; significant valuation fees could undermine what might otherwise be the best selling endowments prices available.
Finally, compare quotes from suitable companies to see where you can get the best price. Consider finding reviews of your prospective buyers if in doubt. You should always seek professional advice to make sure you get the best deal selling endowment policies UK wide.
If you believe you have a claim against a company or advisor for mis selling your endowment policy to you this is something you'll need to follow up separately by registering a complaint with the company direct then taking the matter to the Financial Ombudsman if needs be.
We explain what endowment policies are and how they work.
How to cash in your endowment policy
How do unit-linked endowment policies work?
Endowment tax issues explained
What is a traded endowment?
What are endowment policies?
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