Endowment policies

Endowment policies were popular throughout the eighties and nineties as a means of mortgage repayment.

Existing endowment policies are now highly sought after by investment companies, so if you have an endowment policy you’re considering surrendering, you can sell it on instead get more than if you just surrendered the policy back to the Life Company and re-invest the proceeds.

Endowment policies in action

Endowment policies combine a savings plan with an element of life insurance. The idea behind endowment policies was that, upon maturity, they will cover the value of your mortgage (with a tax free lump sum on maturity).

However, if you should die before the term of the policy, the insurance aspect of the policy will pay off the remainder of your mortgage.

With-profits endowment policies

With-profits endowment policies are investment vehicles designed to provide savers with access to stock market and other investments at lower risk. With-profit funds invest in property, equities, gilts and fixed interest return investments.

These returns are smoothed to reduce the volatility you would see with direct investments. With-profits endowment policies grow through annual bonuses paid throughout its term. When endowment policies end a terminal bonus may be added.

If you have endowment policies that you no longer need or want, and are considering selling them, contact aap to find out how much your policy could be worth.