Cashing in/selling endowment policy

[Richtea1970]

We took out an endowment policy for £75k, to support our mortgage, just under 25 years ago. It was caught up in the endowment miss -selling and we were given some compensation some years ago.
The policy is due to mature next May and having just received a surrender value (55k) its not much different to what its projected to be worth in May (between 55 and 58k). We've got £40K to pay off on our mortgage, so I'm thinking of cashing in now paying off the mortgage and banking the rest.
I've always been told that a endowment makes most of its money in the last year but in the current economic climate, I presume this isn't the case?

And second point, has anyone sold their endowment to a third party, would it be worth it, how likely would we be to get a higher amount from a third party?

Many thanks

[Sarnie]

See what you would get offered for it, if anyone would buy it, it's because they think they will get more back by continuing it till the end, than they'd be giving you.......so it would be in your interest to continue it yourself!

Depending on the type of Endowment you have there are terminal bonus' to increase the value at the end.......thats why companies buy Endowments from people who don't really know what they have got and how it works.........they buy them and continue them till the end........

[Richtea1970]

But bearing in mind it is almost at the end (6 months to go), projections don't look great (even on the higher quoted return).
Would terminal bonuses be affected by the current economic downturn?

[snabzter]

Terminal bonuses will depend on the current economic environment to an extent. Companies smooth payouts on conventional with profits policies by usually declaring terminal bonuses once a year, but in times of volatile markets they may declare them more frequently. This is to protect policyholders by not overpaying or underpaying. Who knows how markets will behave over the next 6 months.

Surrender values tend to be smoothed into the expected maturity value so there are no big steps up or down.

[darreni]

Terminal bonuses are relevant to with profits funds. You should note that Terminal bonuses are not guaranteed & can be reduced or removed at any time- usually during times of market volatility.

Terminal bonuses are payable when a terminal event occurs (hence the name), such as maturity, death or early surrender.

[Richtea1970]

Good information, thanks all