Why do people surrender or sell endowment policies?
The reasons are varied but are usually attributed to a change in circumstances.
Every year millions of pounds are lost by people who surrender their unwanted endowment policies back to the life companies rather than selling them on the open market.
How Can ESP Help?
ESP act as a ‘trawler broker’ approaching several market makers (buyers) to try and obtain the best possible price for our client’s endowments.
Where Do We Go From Here?
If you would like ESP to ‘trawl’ the market and provide a quotation for your endowment policy, please complete the enquiry form and click the send button or telephone us if you prefer. This is a free no obligation service.
Reasons for Surrender
The reasons are varied but are usually attributed to a change in circumstances such as redundancy, divorce or a change in mortgage arrangements.
It is important for anybody thinking about encashing a policy to consider all options. These are:
- Surrendering the policy direct to the issuing life office.
- Borrowing against the policy, either from the issuing life office or from a bank using the policy as security.
- Making the policy ‘paid up’ which means no further premiums are payable on the policy, but reduced benefits will be received on death or maturity.
- Selling the policy on the second-hand market.
However if you have considered these alternatives and have decided to encash your with profit policy then ESP will try to help you get the best price.
Other Important Factors to consider before deciding to Sell or Surrender an Endowment Policy
- Policyholders should remember that if they surrender or sell their policy they will lose the benefit of the life insurance or other associated cover which may still be very important to them. If so you may want to arrange replacement life assurance beforehand. Also if their policy is with a mutual life office which subsequently demutualises or with a life office which makes a distribution of its orphan estate they would lose the potential of any possible windfall payments.
- If your policy has the benefit of a ‘mortgage promise’ this will be lost if you sell or surrender your policy.
- You are obviously likely to receive less for your policy than if you hold it to maturity but you will also have paid less into it and get paid out earlier.
- If your policy is still part of your mortgage arrangements then you would need to speak to your mortgage lender and possibly change to a repayment mortgage. It is also possible that your policy has a charge or assignment to your mortgage lender which would have to be released before you sell or surrender your policy. You can check this by contacting your endowment company and asking whether there are any unreleased charges or assignments on your policy.
Every year it is estimated that £millions are lost by people who surrender their unwanted endowment policies back to the life companies rather than selling them on. Many people are not aware that there is a long-established second-hand market in these policies and a number of market makers willing to purchase unwanted with-profit policies to sell on to individual investors or specialist investment funds.
Market makers are often prepared to pay a significantly higher price for these policies than the insurance companies surrender values. Somewhat surprisingly however, there can be a large variation in the offers made by the various different market makers and therefore people who have made the decision to sell rather than surrender, may not ultimately achieve the best price unless they make use of a service like ours.
Not all policies can be sold, for example there is currently no commercial market for unit-linked or unitised with-profit policies. Only traditional with-profit policies are potentially tradeable – to find out whether yours can be sold for more than the surrender value follow the link to our Quotation Form.
How Can ESP Help?
Endowment surrender plus is totally independent of any market maker and does not purchase policies directly.
ESP act as a ‘trawler broker’ approaching a number of different market makers (companies that buy and sell policies) and policy buyers to try and find the best possible price for you. With our knowledge of the individual market makers and their requirements, we can usually find higher cash offers than an individual going it alone.
ESP provide a non-advised personal back office service to policyholders who have already made the decision to encash their with-profit policies, meaning that we will not offer advice or exercise any judgment on the merit of any policy sale.
If you wish to receive independent advice regarding the alternatives then please contact an independent financial adviser.
If you would like ESP to ‘trawl’ the market to try to obtain firm offers for your with-profit policy, please complete the enquiry form and click the send button.
Unfortunately it is not always possible to obtain a higher sale price than the surrender value, but if your policy:
- Is issued by an established insurance company
- Is a traditional with profits endowment
- Has run for at least 5 years
- Has a surrender value of at least £4000
Then we may be able to help you.
Our service is:
- Free without obligation
Complete the online form and click send or alternatively call us on 01625 433222 and have your policy details, an up to date surrender valuation and latest bonus notice to hand.