National insurance online

New analysis from independent financial magazine "Money Management" shows that payouts to with-profit endowment policyholders are continuing to fall. The list includes some of the biggest insurance companies in UK.

This is not a sudden fall. It began back in the 1980s and today, most of the companies that earlier offered those endowment policies are simply closed to new business.

The situation had been comparatively better until a few years ago but at present, these developments have the financial advisors around the UK worried about the future of with-profit endowment policies in coming years. Some of them are going to the extent of declaring it a high time to sell your endowment policies or switch to another method of investment.

However, the overall performance of equities in recent years in the UK is yet to hit a state of alert. They are performing pretty well but the equity holders must keep their eyes wide open to keep abreast of the latest changes in the market and should be more flexible in their investment portfolio.

A few months back, earlier this year, the with-profit endowment market was showing some good signs as some of the big insurers were offering higher bonuses. Plans that are maturing this year were supposed to yield bigger payouts than what had been initially expected. However, the predicted good signs for plans maturing in this financial year were only for 20% policyholders.

Market analysts think that this depression is due to lower than expected returns on investments and unconditioned market inflations in recent years.

When this is the general market trend for last couple of years, individual investors should become more careful in their investment moves and should consult some good investment advisors beforehand.
However, it has been commonplace among policyholders to sell their policies long before the maturity date and in recent years the inclination for this has only grown. Advisors say that this is a proven and profitable investment plan if you can predict the right time to sell those policies.

Newer arrivals to this business often ask a simple question "Why should someone buy my policies when I am selling them fearing a market slash"! To add to this, they are often amazed to find out how much more they get than the surrender value. The answer is very simple, bigger investors buy these as a part of their investment portfolio.

Think twice if you want to run the risk of holding your with-profit endowment policies in coming years!