Should I terminate my endowment policy?

Yeah dont terminate first without exhausting all options...

Hi anon,

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I hope this is not too late, but you may contact the insurer to see if they are able to provide options. Terminating a policy is always the last resort.

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Some possibilities in your scenario include

1. Pausing the premium (not premium holiday, that is for ILPs)
2. Reducing sum assured (and hence premium)
3. Selling off to a company that deals with traded endowments
4. Going into automatic policy loan first to sustain the policy while you look for a job
5. If 4) runs out of value and the policy lapses, a lapsed policy can still be reinstated if you are within a certain grace period
6. Re-dating the policy (not sure if GE has this option)

I am not sure how many months of emergency savings you have, nor what age you are or your specific circumstances, however suffice to say the traditional recommendations of 3 to 6 months that you might read about are grossly inadequate in today's age, with job security not a guarantee for most sectors as well as the time taken to find a job increasing. My benchmark is AT LEAST 12 months of expenses. It doesn't mean that all the money has to be sitting in a bank earning close to zero.. You can park in FDs, MMF, etc.

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I hope you will be able to land a job soon, all the best. When you do, please save up the 12 months of expenses, and aim to have more when you are older (as you age, finding a job becomes even harder). Expenses should include all essentials (food, utilities, basic transport, mortgage if applicable, etc) as well as your insurance premiums (protection policies at the minimum, and endowments if you can).

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Good luck.

If you really cannot to pay back, you just have to terminate the policy. Another alternative is to sell your policy to companies that actually buy endowment plan (at least halfway to maturity). I heard of REPs holding who buys endowment and life policies, and they give you the money that you have paid and interest earned till that point. Give it a try.

Usually these type of plans offer a 'Premium Holidy' whereby the insurance company would use your profits from your plan to pay for your monthly premium for hard times like this. I heard people taking 6 months premium holiday too so I think it's worth a shot to ask your Financial Advisor regarding this premium holiday. Try not to terminate your plan as you would suffer heavy losses as your plan is not even close to maturity.