Marriage break-up is one of the most common reasons for selling an endowment policy in the UK. In fact, research shows divorce settlements to be amongst the top reasons cited.
Usually sold because of a court ruling or just a simple division of assets, divorce is listed alongside other reasons given for selling an endowment. These include re-mortgaging, mortgage re-structuring from interest only to a repayment basis and the possibility of it not paying off the remaining capital at the end of the mortgage term.
Endowment policies were traditionally used to repay a mortgage at the end of the mortgage term. However, around eight in ten endowment policies are unlikely to pay off the full mortgage they were taken out to cover. This has resulted in many people deciding to either surrender their endowment back to the life company or sell their endowment policy on to a market maker.
The top five reasons customers gave for wishing to sell their with-profit endowment policies according to research are as follows:
- Endowment policy was part of a divorce settlement
- Re-structuring their general finances or mortgage arrangements
- Concerned the endowment will not pay off their mortgage at the end of the term
- Moving home and re-mortgaging for a larger amount
- Want the cash for other short-term lifestyle expenditure (weddings, etc)
Selling your Policy: Frequently Asked Questions
Is my policy suitable for sale?Generally only with-profit and Whole of Life endowment policies are tradable. Unit linked or "unitised" policies are based on units which are invested in stocks and shares. As the value of units can change daily, it is impossible for a long-term value to be attached to this type of policy. Other criteria which determine the suitability of a policy include the life company, length of time that a policy has been in force and the surrender value. As a guideline, a with-profits endowment policy that has been in force for at least 7 years, with a surrender value of £1,500 or more will be of interest and you could receive more by selling than by surrendering it back to the Life Company.
How do I sell my policy?Name and address of life (lives) assured
- Name and address of life (lives) assured
- Name of insurance company/life company
- Type of policy (with-profits/unit-linked)
- Policy number
- Start and maturity dates
- Basic sum assured
- Total bonuses declared
- Date to which bonuses are declared
- Current Surrender Value
- Gross premium payable
- Premium frequency (i.e. monthly etc.)
If you have all of the information above, you can get an instant indicative valuation of your policy by clicking here
Divorce is the most common reason for selling an endowment policy. This articles discusses how you can sell your endowment policy and whether or not you can.
Endowment : OnDivorce
Divorce is the most common reason for selling an endowment policy. This articles discusses how you can sell your endowment policy and whether or not you can.
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