Is it a good idea to surrender your endowment policy?
Surrendering your endowment policy
The vast majority of endowment mortgage providers allow the policy holder to "surrender" their policy.
This allows you terminate your policy early in return for a certain amount of money - the "surrender value".
However, surrendering your policy often comes at a cost - with how much you receive depending on how long the policy has been running when it is cashed in, the current state of the markets, and the policies of the endowment company.
Fundamentally, endowment policies are long-term investments and cashing them in early generally means getting a poor return.
However, instead of taking the surrender value, policy holders can sell their endowment on the open market.
This means another investor will take over responsibility for making premium payments and will receive the pay out on maturity in exchange for an up-front sum.
Typically, if you sell your endowment policy on the open market you will receive more money than if you simply surrender it.
You can obtain a quote as to how much the endowment policy would be worth if sold on the open market instantly, for free, and with no obligation to sell.
How much the policy is worth is generally based on the policy age, which company issued it, how much has been paid in, and other basic details.