Like Tree3Likes
  • 2 Post By freeier

Very old whole life policy

Closed Thread
  1. #1

    Join Date
    Oct 2006
    Location
    Hong Kong
    Posts
    15,557

    Very old whole life policy

    Am trying to work out the value of a whole life policy and get my head round it all. Background is that a long time a ago signed up to a whole life policy (when I was a mere teenager). I cannot even remember why I signed up, probably because my parents told me to. The deal was you pay 500 pounds a year and the insured amount was 50000 pounds, which is the basic death benefit.

    The policy includes a "dividend" and a "paid up addition" and based on the projection provided by the insurance broker would mean if I were to die today my beneficiary would get 100k.

    Based on the projections if I were to die when I am 85 years old the pay out would be 300k.

    It seems this is a policy with an element of investment but trying to get a straight answer from the broker is not easy.

    On the face of what I have provided (and am not sure if I have all or enough information), any thoughts on this?

    I understand if I were to surrender the policy today I would get back anything I have put in without any of the dividends or profits made.

    I'm debating whether just to surrender the policy as the payout is pretty low but then again the yearly premium is also quite low.


  2. #2

    Join Date
    Dec 2002
    Location
    θ–„ζ‰Άζž—
    Posts
    47,967

    You would not get the risk component back, depending on the investment component (I suspect this is MINIMAL @ 500GBP/year?) the redemption may be little.

    If the issuer is still around, probably bypass the broker and get the redemption value from them and also check if you can suspend payments - some policies do allow you to do that.


  3. #3

    Join Date
    Nov 2005
    Location
    Cramped island
    Posts
    5,585

    if its me, i likely will leave it there..
    life participation policies like these tend to have the cost (of sales) deducted at very early stage, usually first five years.
    then they charge you pretty much flat rate mortality cost over the years.
    you are now at the point where you should be reaping the 'reward' for paying most of the earlier costs.. surrendering this now would mean you have really went thru the bad period for nothing. and since your probability of death is definitely higher now than years ago...

    shri and HK_Katherine like this.

  4. #4

    Join Date
    Dec 2013
    Location
    Hong Kong
    Posts
    12,323

    I would keep it. I had a mortgage endowment with similar kinds of terms, which eventually ended a few years back and they sent me a cheque. I calculated the return on my money and it was about 4% (pa over 25 years). Not huge, but definitely better than leaving money in the bank! As others have said, the early years are always the loss making ones. If you care at all about having such a policy you might as well keep it.