Best and worst: Attitude matures on pay-outs - 25-year endowment policies

WITH-PROFIT endowment policies that are cashed in before they mature are not treated in the same way as policies that run their full term.

In recent years publicity over how much investors lost if they did not stay the course has shamed insurers into giving them a better deal.

According to the third annual survey of with-profits policies, conducted for Money Marketing by the actuaries Clay and Partners, pay-outs by several companies have sharply improved. For instance, last year Tunbridge Wells Equitable paid out just 35 per cent of the full maturity value after 24 years of a 25- year policy. But this year the payout level is 83 per cent.

London Life's payout proportion has rocketed from 43 per cent last year to 89 per cent this year.

John Jenkins of Clay and Partners wonders if such a large jump is fair on those who cashed in last year.

In contrast, Friends Provident, one of the poorest performers in the first survey, has been improving cash-in payments gradually.

'There is a case for a modest penalty, otherwise investors may treat the policy like a deposit account. It gives the life office a fair basis for planning; but more than 2 or 3 per cent is not necessary,' Mr Jenkins said.

On 10-year policies cashed in after nine years, the best payer is Equitable Life, which delivers 85 per cent of the full- term payment, followed by Sun Life, Scottish Provident, Prudential and Scottish Life. The worst performer was London Life at 63 per cent, followed by National Mutual Life, Royal London, AXA Equity & Law, and Pearl.

----------------------------------------------------------------- BEST AND WORST: SURRENDER VALUES ----------------------------------------------------------------- 25-year endowment policies ----------------------------------------------------------------- The best % 1 Norwich Union. . . . . . . . . . . . . . . . . . .92 . . . . . . . . 92 2 Equitable Life. . . . . . . . . . . . . . . . . . 91 3 Scottish Widows. . . . . . . . . . . . . . . . . .90 4 Scottish Life. . . . . . . . . . . . . . . . . . .89 4 London Life. . . . . . . . . . . . . . . . . . . .89 The worst 25 Sun Life. . . . . . . . . . . . . . . . . . . . .75 26 Friends Provident. . . . . . . . . . . . . . . . 74 27 Royal London. . . . . . . . . . . . . . . . . . .73 28 Pearl. . . . . . . . . . . . . . . . . . . . . . 66 29 Royal Insurance. . . . . . . . . . . . . . . . . 50 ----------------------------------------------------------------- Comparison of value at 24 years against current value at 25-year maturity. Based on a policy for a 29-year-old non-smoking man paying pounds 20 a month. Source: Money Marketing -----------------------------------------------------------------