Selling an Endowment
Selling an Endowment Policy
A lot of endowment policyholders find in necessary to sell their endowment. There are a variety of reasons that they may want to do this, it may be because they need the money for something else, or they returns may not be sufficient, or perhaps there has been a major change in their life like a divorce. Unfortunately simply surrendering your endowment is rarely a good idea, the surrender value will usually be far less than you expected, often less than the amount you have paid into it. A better option is to sell your endowment, there is a whole marked dedicated to buying and selling secondhand endowments. If you are planning on selling an endowment it is a good idea to get quotes from a number of brokers since prices can vary appreciably.
Not every endowment policy can be sold, there are a variety of different policy types and generally only a with profits endowment can be sold on the second hand market. You will also need to keep in mind that there will be a minimum time that the endowment has been running before it can be sold. This time will vary but is usually in the range of a third of its full term.
If you have a policy that can be sold doing so if fairly straight forward, there are plenty of companies that would be happy to take it off of your hands for you. If you are selling and endowment you should try to get quotes from several different companies to make sure you are getting a good deal. In general you should be getting offers about ten to fifteen percent higher than the surrender value of your endowment.
The fact that you can sell your endowment doesn't necessarily make it a good idea. Although selling an endowment is almost always a better option than surrendering your endowment, it is usually best to hold onto your endowment. A lot of people choose to sell because they are unhappy with the returns they are getting and think that they would make more investing in something else. This may be true but you need to keep in mind that endowments tend to grow in value more quickly near the end of their life. Historically holding an endowment until maturity has provided very good returns. You will also need to keep in mind that if you sell or surrender your endowment you will lose your life insurance coverage, if you need life insurance you will need to factor in the cost of a policy.
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