Divorce and Endowments

Marriage break-up is one of the most common reasons for selling an endowment policy in the UK. Research conducted by AAP, the UK's largest endowment policy market maker, among its customers shows divorce settlements to be one of the top reasons cited.

Usually because of a court ruling or just a simple division of assets, divorce is listed alongside other reasons given for selling an endowment. These include re-mortgaging, mortgage re-structuring from interest only to a repayment basis and the possibility of it not paying off the remaining capital at the end of the mortgage term.

Endowment policies were traditionally used to repay a mortgage at the end of the mortgage term. However, around eight in ten* endowment policies are unlikely to pay off the full mortgage they were taken out to cover. This has resulted in many people deciding to either surrender their endowment back to the life company or sell their endowment policy on to a market maker.

The top five reasons customers gave for wishing to sell their with-profit endowment policies through aap are as follows:

Selling your Policy:Frequently Asked Questions

Is my policy suitable for sale?

Generally only with-profit and Whole of Life endowment policies are tradeable. Unit linked or "unitised" policies are based on units which are invested in stocks and shares. As the value of units can change daily, it is impossible for a long-term value to be attached to this type of policy. Other criteria which determine the suitability of a policy, include the life Company, length of time that a policy has been in force and the surrender value. As a guideline, a with-profits endowment policy that has been in force for at least 7 years, with a surrender value of £1,500 or more will be of interest and you could receive more by selling through aap than by surrendering it back to the Life Company. To see if your policy is suitable click here.

How do I sell my policy?

You will need to provide the following information, which can be obtained from your Life Company. Before contacting your Life Company click here to ensure your policy is suitable for sale. Name of Insurance Company/Life Company Type of policy (with-profits/unit-linked) Policy Number Start and Maturity dates Basic Sum Assured Total bonuses declared Date to which bonuses are declared Current Surrender Value Gross premium payable and premium frequency (i.e. monthly etc) Name and address of life (lives) assured

How long does it take to value a policy?

If you have all of the information above, you can get an instant indicative valuation of your policy by clicking here.

The policy is secured on my mortgage - is this a problem?

No- if the value of the policy is greater then the outstanding loan, or if the loan is being repaid or you are restructuring your finances, this would not prevent you from offering your policy for sale. We will liaise with your lender to arrange the sale.

How long should it take until I receive my cheque?

Approximately 21 working days. However, this greatly depends on how quickly we receive all the relevant paperwork from you and your life office so that we can make all the appropriate checks and transfer title of the policy.

When do I stop paying premiums on my policy?

Normally you will be responsible for paying premiums up to the next month after the agreement date, but all this will be laid down in the offer letter we send to you.

Why should I sell through AAP?

AAP was established in 1968 and is the largest company specialising in the buying and selling of Traded Endowment Policies (TEPs). AAP has been involved in the purchase of over £1 billion of with-profit endowment policies since 1968. With more than £250 million available to buy with-profits endowments, aap will value your with-profits policy completely free of charge and without obligation. AAP can offer up to 35% more for an endowment policy than the issuing life company, however, the price offered will be affected by the length of time the policy has been in force and the choice of life company and may not always be as much as 35%.

What is the procedure following an agreement to sell a policy to aap?

An offer letter is issued, which must be signed by you in order that the transfer procedure can begin. We will then ask you to complete a simple transfer form and supply us with some simple additional information and documentation. There are no costs or charges to you and the transaction should be completed in approximately the same time as it would take to surrender the policy.

Are there any hidden charges?

The offer you will receive from aap is a cash offer and that is the amount you will receive. There are no fees or commissions to pay.