I find endowment policies totally bewildering. If a policy pays 2.5% bonus.
Can this be compared with the 5% you can get in a Cash ISA? If so then
there's not much of a comparison is there? Or it's not that simple I guess?
"Trevor" <> wrote in message
news:44bf5e8a$0$3502$
>I find endowment policies totally bewildering. If a policy pays 2.5% bonus.
>Can this be compared with the 5% you can get in a Cash ISA?
You will get an annual guareteed bonus which cannot
be taken away and a terminal bonus at the end. Historically,
the terminal bonus on a 25 year policy is approaching 100%
so that's an extra 4%. Whether this is likely in the future
is another matter, but even if it's lower than this, you can't
compare the two
tim
> If so then there's not much of a comparison is there? Or it's not that
> simple I guess?
>
In message <>, tim
<> writes
>
>"Trevor" <> wrote in message
>news:44bf5e8a$0$3502$
>>I find endowment policies totally bewildering. If a policy pays 2.5% bonus.
>>Can this be compared with the 5% you can get in a Cash ISA?
>
>You will get an annual guareteed bonus which cannot
>be taken away and a terminal bonus at the end. Historically,
>the terminal bonus on a 25 year policy is approaching 100%
>so that's an extra 4%. Whether this is likely in the future
>is another matter, but even if it's lower than this, you can't
>compare the two
The annual bonus is expressed as a percentage of the sum assured, not a
'fund value'. Sometimes there are two bonus rates, one on the sum
assured and a different rate for the bonuses on bonuses. So the answer
to the OP is that you can not compare bonus rates with interest rates.
terminal bonunsses are usually expressed as a percentage of the summ
assured plus all bonuses awarded to date. Of course all of these bonuses
are [aid at maturity althugh some companies pay some 'terminal' on
surrender.
Apart from the incomparability of bonus and interest rates, even if they
were comparabile it would be silly to do so, because with profits are
long term investments with good times and bad times and cash accounts
just pay interest and er, thats it.
--
John Boyle
tim <> wrote:
> "Trevor" <> wrote in message
> news:44bf5e8a$0$3502$
> >I find endowment policies totally bewildering. If a policy pays 2.5% bonus.
> >Can this be compared with the 5% you can get in a Cash ISA?
>
> You will get an annual guareteed bonus which cannot
> be taken away and a terminal bonus at the end. Historically,
> the terminal bonus on a 25 year policy is approaching 100%
> so that's an extra 4%. Whether this is likely in the future
> is another matter, but even if it's lower than this, you can't
> compare the two
True, but it's entirely possible that one can get an annual bonus - say
to Nov 2005 of 0.5% - and if you don't like it and want to escape
Norwich Union, then they'll hit you with a 33.43% MVA...
(Not an endowment mortgage, a WP penson policy from 1993, maturity 2032)
If the OP is considering a WP endowment, then they should immediately
complete an EPA before they are sectioned.
HTH, Alan
--
99 Ducati 748BP, 95 Ducati 600SS, 81 Guzzi Monza, 74 MV Agusta 350
"Ride to Work, Work to Ride" SI# 7.067 DoD#1930 PGP Key 0xBDED56C5
"Alan Frame" <> wrote in message
news:1hisuzt.1wvxxefpkojamN%
> tim <> wrote:
>
>> "Trevor" <> wrote in message
>> news:44bf5e8a$0$3502$
>> >I find endowment policies totally bewildering. If a policy pays 2.5%
>> >bonus.
>> >Can this be compared with the 5% you can get in a Cash ISA?
>>
>> You will get an annual guareteed bonus which cannot
>> be taken away and a terminal bonus at the end. Historically,
>> the terminal bonus on a 25 year policy is approaching 100%
>> so that's an extra 4%. Whether this is likely in the future
>> is another matter, but even if it's lower than this, you can't
>> compare the two
>
> True, but it's entirely possible that one can get an annual bonus - say
> to Nov 2005 of 0.5% - and if you don't like it and want to escape
> Norwich Union, then they'll hit you with a 33.43% MVA...
>
> (Not an endowment mortgage, a WP penson policy from 1993, maturity 2032)
>
> If the OP is considering a WP endowment, then they should immediately
> complete an EPA before they are sectioned.
>
> HTH, Alan
> --
> 99 Ducati 748BP, 95 Ducati 600SS, 81 Guzzi Monza, 74 MV Agusta 350
> "Ride to Work, Work to Ride" SI# 7.067 DoD#1930 PGP Key 0xBDED56C5
Can you explain:
'complete an EPA before they are sectioned'