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£90m lost each year in surrendered consumer endowment policies

aap, the UK's largest endowment policy market maker and part of the TIS Group, is calling on consumers to consider all their options before surrendering their endowment policies back to the life company. They could get a better offer in the thriving secondary market.

Faced with spiraling debt, many policyholders will be considering surrendering their policies. However, they risk losing out on an estimated £90m by surrendering rather than selling on their policies says Andy Mossack, aap's Marketing Director.

"Against today’s uncertain economic backdrop, many policyholders will be thinking about what options are available to them to release cash, and because many are not aware that they could potentially sell their endowment policy instead of surrendering it, they are collectively missing out on millions of pounds more."

Historically, our customers have used the money from selling their endowments to fund lifestyle choices such as home improvements, weddings or overseas trips, but this year particularly, we are seeing a growing number selling to pay off debts.

If a policyholder has made the decision to cash in their endowment policy, they will want to get as much as they can for their investment and selling it instead could give them a whole lot more. Getting a quote from aap is fast and free and if they get an offer to buy it will always be higher than the cash in value.

"When you consider that aap, the UK’s largest trader in endowment policies, can pay more for certain policies than the redemption value offered by the life company which issued the policy, it is worthwhile considering all the options available."

"Life companies make great efforts to inform their customers about their options in order to help them make an informed choice on whether to surrender their policy or sell it on, but there is clearly room for improvement around increasing public awareness on the potential alternatives to redeeming endowment policies, as well as coping with the burden of rising levels of debt."

aap's top reasons for selling endowments

Change of mortgage arrangements
Refinancing Divorce
Paying off debts

How does an endowment policy qualify for selling?

Each policy is looked at on an individual basis as there are many reasons that affect its sale ability. These include the life office that issued it, how long it has to run, its maturity value etc. However there are three main factors that must be fulfilled: it has to be a ‘with-profits’ policy, it has to have been in force for longer than 5 years, and have a surrender (or cash in) value of £1,500 or more.

Selling an endowment policy through aap is a completely free process, and generally customers will get an answer within 48 hours and if an offer is accepted, could receive their money in 21 working days.