The best and worst: With-profit surrender values of endowment policies

Surrender values after 10 years of a 25-year endowment policy; taken out by a man 29 years old and a woman 26 (non-smokers). Sum assured: pounds 30,000. Source: Money Management

IT WOULD not be wise to choose an endowment policy solely on the basis of what it would repay should you cash it in early. But surrender values should perhaps be given more thought, given that some companies pay thousands more than others, according to figures in the latest issue of Money Management.

This is true for both with- profit endowments and unit- linked, though with-profits surrender values exceed those of unit-linked policies because of the reversionary bonuses locked into them.

Prolific's excuse for low surrender values is that its with-profits fund is small and paying over-generous surrender values would jeopardise its ability to provide maturity payouts sufficient to cover the mortgages the policies back.

Scottish Life argues that its premiums are lower than those of some other companies, so it cannot be expected to produce the same level of surrender values.

Ray Milne of Scottish Life insists that many prospective house-buyers are more interested in low premiums than high surrender values.

But Scottish Life still offers premiums which are by no means the cheapest. Equitable Life's current premiums, for instance, are generally at the low end of the range. Its policy-holders seem to have the best of both worlds: good surrender values and reasonable premiums.

------------------------------------------------------------------------ With-profit surrender values ------------------------------------------------------------------------ The best (pounds) 1 Equitable Life 9,974 2 Cooperative 9,176 3 Britannic Assurance 9,125 4 Royal London 8,655 5 Wesleyan 8,398 The worst 26 National Mutual 6,542 27 General Accident 6,289 28 London Life 6,282 29 Scottish Life 5,916 30 Prolific 5,636 ------------------------------------------------------------------------