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  • Financial Planning
    • Introduction to Financial Planning
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    • Why Protection is Important
    • Life Assurance
    • Family Income Benefit
    • Income Protection
    • Private Medical Insurance
    • Critical Illness
  • Savings & Investments
    • Introduction to Savings & Investments
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    • Offshore Collectives
    • Junior ISAs
    • National Savings Products
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    • OEICs
    • Investment Trusts
    • Fixed Interest Investments
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    • Introduction to Business Protection
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    • Relevant Life Cover
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    • Introduction to Mortgages
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    • Standard Variable Rate
    • Fixed Rate Mortgages
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    • Offset Mortgages
    • Second Charge Mortgages
    • Buy to Let
    • Self Build Mortgages
  • Equity Release
    • Introduction to Equity Release
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    • Drawdown Lifetime Mortgage
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    • Annuities
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  • Endowments

Endowments

Endowment Policies

These are life insurance policies that are designed to pay a lump sum after a specific term, and pay out a guaranteed sum if the person insured dies within the term of the plan.

Although it is still possible to buy endowments that guarantee the value of the lump sum at maturity, the majority of policies do not guarantee the maturity value - the money that you get back will depend on the value of the investments within the policy.

By using life insurance policies, the value of the plan at maturity can be paid without paying any further tax if certain ‘qualifying conditions’ are met. Although the policy holder can avoid paying any tax at maturity, the insurance company does pay tax on income and gains within the policy.

These policies can be particularly useful if you have an investment objective you’d like to realise regardless of what happens to you, for example to repay a mortgage; provide a legacy for your children; provide for university fees etc.

However, the policy charges and the cost of the life insurance means that it can take several years before the endowment’s value is greater than the contributions paid in. Also, there are other, more tax efficient and less expensive investment options available, so if you do not have any need to guarantee a sum will be paid if you die, an endowment is unlikely to be the most suitable option for you.

As with most investment the value of an endowment depends on investment performance and is not guaranteed.

THE VALUE OF INVESTMENTS AND THE INCOME THEY PRODUCE CAN FALL AS WELL AS RISE. YOU MAY GET BACK LESS THAN YOU INVESTED.

TAX TREATMENT VARIES ACCORDING TO INDIVIDUAL CIRCUMSTANCES AND IS SUBJECT TO CHANGE.

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Company address: Vision Wealth Management, Westgate House, Banbury Road, Moreton Pinkney, Northamptonshire, NN11 3SQ.

 

T: 01327 317388  F: 01327 220044 E:info@visionwm.co.uk

 

Vision Wealth Management is a trading style of Charles Derby Wealth Management Limited, an appointed representative of Quilter Wealth Limited and Quilter Mortgage Planning Limited which are authorised and regulated by the Financial Conduct Authority (https://register.fca.org.uk/s) No: 440718 and 217742.

 

Charles Derby Wealth Management Ltd is registered in England and Wales: 07629860. Registered Office: Senator House, 85 Queen Victoria Street, London, EC4V 4AB.

 

The guidance and/or information contained within this website is subject to the UK regulatory regime and is therefore targeted at consumers based in the UK

 

 

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