Protect your family's future with endowment policy cash

Publication date | 03/03/2010

Should a household suffer an unexpected event, keeping up with a range of financial commitments such as school fees, debt repayments and general bills could prove difficult.

Despite the potentially serious consequences of not having financial protection in place, a new study for Friends Provident shows that almost half of people in the UK do not have critical illness or life insurance in place.

Chris Radford, chief executive officer of aap, the UK's biggest buyer of endowment policies, said some of its customers, with young children especially, had decided to sell their underachieving endowment policies in order to raise the money required to strengthen their long-term finances.

Many households do not have monetary protection in place

The survey by 72 Point for Friends Provident revealed that a third of Britons believe that if they were unable to work because of an illness or injury they could live on less than 35 per cent of their take-home income.

However, such a figure might prove too optimistic, especially when a plethora of monetary commitments which individuals have to meet are taken into account.

According to the study, of those people who do have a policy in place, 53 per cent do not know how much they would get if they needed to make a claim.

Not knowing how much financial protection a household has could prove disastrous should an illness or death occur. This could leave families underinsured, especially if a marriage has taken place of children born since a policy was taken out.

Commenting on the findings, Ed Stuart-Brown, head of protection sales at Friends Provident, said: "It's a sad fact of life that the unthinkable can and does happen and the last thing you would want is to leave yourself or your family in dire financial straits. I would also urge those who do have cover to dig out their policies and review their level of cover to ensure they have made adequate provisions should the unexpected happen."

Endowment policy cash could help long-term finances

Mr Radford, from aap, said some of its customers worried about their family's long-term financial security had decided to sell their unwanted endowment policies to raise the money to help clear debt and strengthen household coffers to prepare for the future.

He added that should aap make an offer to purchase an endowment policy, it will always pay more than the surrender value offered by the insurance company.

Reasons to sell your endowment policy