Cashing in your Endowment : Surrender or Sell?
Although an endowment mortgage policy is a long term investment that will give the best return if allowed to reach maturity, many people who have been stung by endowment mis-selling want to 'cut their lossses' and move to another another kind of mortgage.
This is especially true of people who have already received endowment compensation, as no further claims can be made on the same policy and there is every chance that further losses will result which will not be covered.
Whatever the reason people choose to cash in their endowment, the two most common ways of doing it are by surrendering it back to the insurer you bought it from, or by selling it on the second hand endowment market.
Surrendering Your Endowment
Effectively, when you surrender a policy you are asking the insurance company to buy it back from you. You will be quoted a surrender value, which is the price the insurers are willing to pay. Unfortunately, this price can be unpleasantly low.
You may not even get back what you've put in over the years, as the early premiums will be used to pay for commissions and administration fees etc, which must be cleared before your premiums can start being invested. Even with a well-performing policy, it can take over 5 years before the surrender value is as high or higher than the amount paid into the policy.
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