We have always been highly sceptical of the benefits of endowment policies. They have been an unacceptable mixture of two financial products which are only brought by insurers together to cause confusion, and to disguise costs. You are now in a position where you might be considering surrendering such a policy. When making your decision, you should allow for the following factors:

First, we will NOT advise you on this particular decision. What follows is purely general advice. There are many individual factors in each case, which you will have to weigh yourself. Companies are different, and policies differ from year to year as does the financial climate, and your own needs.

Endowment policies are not intended, or designed to be surrendered. You have signed a contract to save (usually) over a set period of years. To surrender the policy early is to break that contract, and you may be penalised accordingly. Many schemes are structured so that more than half of the full return is payable only if you complete the scheme - a policy worth £60,000 at full term may be worth less than £30,000 the month before.

The general rule is simple - DO NOT SURRENDER the policy. It may be that you will receive money now, when you need it more, but usually it will prove to have been an expensive choice.

There are several choices:-

1. You may continue the policy as it stands. Typically in a divorce situation, this might be possible, with one party buying out the other.
2. You may cease to make the payments under the policy, making it paid up. This means that the policy continues until maturity, but with a reduced payout. The return on the sums already paid in should, however be fair. It might be possible also to make an arrangement with the Life Company to take an agreed payments hoilday, or suspension of payments and or benefits.
3. You may be able to sell the policy through one of the companies arranging this. If the policy is suitable for sale, it may make up to a third more through resale than through surrender. Many policies are sellable, and many are not. You can only ask. We can arrange this for you, and sometimes our fees to you will be covered by a commission which we ask you to consent to sign over to us for this purpose.
4. Last, and least attractive (but most common choice), is to surrender the policy.

We are not able to advise you about any particular policy, nor to take any practical part in the surrender of a policy, if that is what you choose to do. There are financial advisers who will happily advise you. At the very least ask the insurance company what level of return (or range of returns) is now expected for this product.

What we do ask you to do, is to ask why the advice you receive now is so different from the advice you were given when you took the policy out, who gave you that advice, and why. It has always been clear that the returns predicted by those selling the policies were not sustainable if interest rates fell. We take little pleasure in having been right, but we do just wish that the financial services industry would now feel a little shame, and show a little humility.