Financial Services > Investments > Endowments > Life Assurance Investments

Life Assurance Investments

Once a head turner among life investment policies, it is steadily being outperformed by lesser risk investments like ISAs. It combines life assurance with investment returns. Often sold to pay off an interest-only mortgage, its appeal lies in low tax rates, tax-free premiums and a bonus on maturity.

Its shortcoming lies in its dependence on volatile stock markets and inflation which affects the final payout. In many recent cases this has proved to be the policy holders undoing, leaving them short of the sum needed to pay off their mortgage.

 

Click here for details of how to sell your endowment policy or how to claim compensation if you have been mis-sold an endowment.

With Profit Endowments are for a fixed sum for a fixed period. Bonuses from investments declared by the assurance company are included at maturity. There are two types:

  1. Full with profit ensures the full value of your loan back but is expensive.
  2. With profit - guarantees only a percentage of the original loan amount agreed upon contract. Cheaper and more common, but prone to shortfalls.

Low Start Endowments are usually for a period of 25 years with an increasing premium rate. These are not suitable for early trading. Unit-Linked Endowments are also available. Click here for more information.

8 out of 10 people in the UK are paying too much for their mortgages. To make sure you are not one of them, visit us at www.mortgages.co.uk

 

UK Investments - Financial, Property & Other Investments - 1998-2008

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