Should I wait to sell my endowment?

Originally Published in This is Money, 21 April 2008

A Customer Asks:

I have a Norwich Union with-profits mortgage endowment taken out in July 2000 which is due to mature in 2025.

I no longer wish to keep this investment going and have discovered that it has a surrender value of around ?10,000.

I have been told that I could get more money for an endowment by selling it to a traded endowment company but have discovered that it does not meet their criteria for sale as it has not run for long enough.

If I wait until the policy has run for seven years can I then sell it later this year and is it likely that it would get more than the surrender value?

LS, Herts

Paul Harrison, of traded endowment firm 1stPolicy, replies:

I am of the opinion, that there may well be companies which are interested in your policy in the near future, given the current thirst for the product and the direction the market has been taking of late.

At this moment in time, we at 1st Policy are purchasing Norwich Union policies with maturity dates as far out as 2024, so it's quite possible that next year we may be able to consider 2025. Of course there are no guarantees because there are many factors beyond our control such as changes to bonus rates and surrender values.

The decision to hold or fold is often down to personal circumstances. You may also need to consider the value of the life assurance attached to the policy which you would be sacrificing.

Life assurance premiums increase as we get older and can increase still further should our health deteriorate. It might be prudent at this stage to seek the opinion of a financial adviser.