Selling endowments can provide a way for investors to recoup more of their investment capital than if they simply surrendered the endowments to the insurance companies from which they were purchased. Endowments, which are used in the United Kingdom, combine elements of savings plans and life insurance policies to help pay off mortgages. Unfortunately, these endowments are subject to economic conditions which can severely diminish their value. As a result, selling endowments can be an effective way to gain more profit from the investments, if the process is executed properly.
It is important to understand how endowments work before considering selling them. An endowment is an investment plan popular in the United Kingdom that allows the policy-holder to contribute to the policy in installments. The capital within the endowments can increase if market conditions are favorable. At the end of the policy, which can come either with the policy-holder's death or end of the policy term, a lump sum is paid out that include the original amount, plus any gains or minus any losses accrued over time. This lump sum can be used to pay off a mortgage.
Unfortunately, the failure of the investments in an endowment can force a decision from a policy-holder. If the investor decides that he or she can no longer take the losses, the endowment can be sold back to the insurance company in a process known as surrendering. On the other hand, a third party may be willing to buy the endowment for a higher price than the surrender price. These third parties create the market for selling endowments.
Policy-holders should realize that they have options for selling endowments. They should first contact the insurance company that sold them the policy to determine its current value. Armed with this information, policy-holders can compare that price to any offers that might be available on the endowment market to see if a better deal can be struck.
The process of finding the right price for an endowment can be daunting for an individual not familiar with the market. As a result, those people considering selling endowments might want to seek out specialized companies that locate willing buyers for endowment policies. This might be the right strategy simply because these companies can rapidly access the prices that are offered by endowment buyers, who are also known as market makers. Since the market changes fast and prices can change quickly, companies like this can provide a great service to individuals wishing to make a favorable deal.
