selling endowment policies

[tali122]

has anyone sold their endowment policy to companies that purchase them- why do they claim to pay significantly more than maturity value for them - how do they gain? , i do find the whole concept rather strange

[dzug]

They will not pay more than the maturity value - the maturity value is what they will get for them when the policy expires.

They will pay more than the surrender value (which is what the insurance company pays if you cash in early). The surrender value is always low to discourage you from cashing in early - the insurance company may have to sell long-term investments at a loss to pay you.

So they pay you a bit more than the surrender value, carry on paying the premiums and (they hope) cash in big time at the end.

[Fulton]

My wife has just sold a policy, and we are using it to pay off the remains of the mortgage, We worked out that by paying an amount equal to what we were paying for the mortgage and insurance into a higher paying account, we would save far more that way than hoping that there would be more cash left over at maturity.

There are a few companies out there that buy policies, have a look at thisismoney.co.uk , a Daily Mail website, for further info.