If you have ever considered surrendering your endowment policy you may have been alerted to the option of selling the policy instead. Endowment traders can make higher offers for your Guardian Assurance endowment policy than the Guardian endowment life office. Thee are a few variables to take into account when assessing the value but all the work is done for you. So why not find out what your Guardian Assurance endowment policy is worth to an endowment trader as well as the Guardian Assurance surrender value office, and then you can have a choice.
It's not just with-profits endowments that are disappointing savers. More than £21 billion is tied up in another insurance company disaster known as the unit-linked endowment. Just one insurance company has given savers any profit on these investments over the past ten years.
What have they
Unit-linked endowments are laden with high charges and pathetic investment performance.
Unlike with-profits, these endowments don't serve up regular bonuses. Instead, their value can move up and down depending on the skill of the investment manager.
We compared the insurance companies' unit-linked endowments with similar funds run by unit trust companies and with High Street savings accounts. The insurance companies were beaten hands down in both cases.
Money Mail asked 32 companies how much £50 a month saved for ten years into a 25-year unit-linked endowment is now worth. The figures provided assume the money - a total of £6,000 - has been invested in the companies' mainstream balanced managed funds.
Twenty-five companies gave figures. Of those, only Provident Mutual has managed to keep that £6,000 in one piece. But, even then, it has grown by only a meagre £72 over ten years to £6,072.
In the worst case, Guardian has managed to shrink £6,000 to £4,122.
Unit trust companies also run funds with a similar asset mix. The average of all balanced managed unit trusts has turned £50 a month invested over ten years into £6,691.
The best of this bunch, New Star's Fund of Funds Portfolio Account, turned £50 a month into £8,307 - £2,235 more than the best insurance company fund.
Had the money gone into an average bank and building society savings account, it would be worth £7,088, says Halifax.
Guardian may not be the worst example, as a number of insurers refused to provide figures. They are Allied Dunbar, Eagle Star, Lincoln Financial Group, London Life, NPI, Pearl and Skandia Life.
Unit-linked funds directly reflect how the assets they hold - usually shares along with bonds, property and cash - are doing. Investors feel the full effect of bad investment decisions and stock market problems but get the full benefit when things are going well.
The balanced managed funds looked at in our survey are not supposed to be high risk. They can hold a maximum of 85% of their money in shares and half the total assets must be sterling-based, that is, invested in UK shares, bonds, property and cash.
How did it
Endowments were designed to meet the needs of commission-hungry salesmen rather than the homebuyers relying on them to pay off their mortgages.
The amount of commission handed over to salesmen is quite staggering.
Often it amounted to the best part of the first two years' premiums paid in - a massive £1,200 in our £50 a month example.
This money was paid up-front to the salesmen and led to smash and-grab selling tactics that were known in the industry as 'rape and escape' sales.
The enormous up-front commission-payments come on top of all the other charges sneaked in by the insurers that are paid by unsuspecting savers, month after month.
These charges may look small but added together they can amount to as much as 10% of each month's premium.
One of Guardian's charges is a £3.41 a month service charge.
And it doesn't end there. The endowments have expensive life insurance built into them. Norwich Union estimates that £500 of the £6,000 invested in figures it provided has gone to buy life insurance.
The effect of all these charges is devastating. Graham McCulley, a director at independent financial adviser Investment Quorum, says: 'When you try to look at how well these plans have done over ten years, you have to remember that money has been going into the investment pot for just eight years.'
For example, HSBC Life would have made a respectable £6,632 over ten years if its endowment had charged just 1% a month to run it.
But thanks to the high charges, the investment is actually worth just £5,015. The reason? No money was paid into the plan for most of the first two years, leeching £955 out of the plan.
Policy fees worth £294 have been taken out, a reduction in so called allocation rate - the proportion of the monthly premium actually paid in - costs another £68 and life cover takes up a further £300.
In total, £1,617 - more than a quarter of the total premiums paid - have been snaffled by HSBC Life in charges.
After charges have taken their toll, dismal fund management then plays its part. Aegon, which owns Guardian with the worst performing fund, admits there has been a problem.
A spokesman says: 'Our overall equity performance has been disappointing over the past few years. This has had a major impact on our managed funds.
'We have made a number of changes to address this and we are confident that this will translate into improved performance going forward.'
Mr McCulley says part of the problems is that, unlike unit trusts that are often sold on the basis that they are run by star fund managers, it is often very hard to tell who exactly is managing insurance company funds.
This means there is no one to take responsibility for how well or how badly a fund is doing.
Often these funds have stopped taking in new customers so there is no incentive for companies to turn in a top-notch performance. 'Accountability is a big question,' he says.
Tax also hinders unit-linked plans. While any payout will be free of tax provided an endowment has been running for at least threequarters of its term, the money paid in is taxed more heavily than it would be in a comparable unit trust fund while it grows