Well endowed

By THIS IS MONEY
Updated:

 

I have an endowment policy with Eagle Star that I intend to keep for its full term, but does the mass early surrender of such policies help me by making more money available to existing policyholders? ME, Beverley, Yorks.

Craig Wetton of Chartwell Investment Management says: It's a grey area. It depends on how companies work their with-profits funds. Certainly if you stay the course people surrendering prior to maturity will not affect your returns adversely and if anything, if you stay the course you may benefit slightly from the on-going investment performance.

The mass surrender you talk of is a bit of a myth - partly because so many people are now selling policies instead of surrendering, so the buyer continue to pay into the policies until term. So it probably balances itself out in the long run.

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