The Association of Policy Market Makers is urging homeowners to seek advice before surrendering their endowment mortgages.
The move comes after research showed that around three quarters of endowment
policyholders are facing shortfalls, meaning their policy is unlikely to pay off their mortgage.
Brian Goldstein, chairman of the association, said that as notification letters landed on doorsteps some homeowners might consider surrendering their endowment policy. However, he warned they might not realise the value of the bonuses they had accrued.
"While many people are facing endowment shortfalls, they shouldn't rush into surrendering their policies. I would urge those with endowments to seek professional advice before they act.
"Policyholders often fail to realise that the value of the endowment they are considering trading or surrendering comes with bonuses that, once declared, cannot be taken away," he said.
Mr Goldstein said that unwanted endowment policies are being bought as traded endowment policies, or TEPs, by people looking to boost their pension savings or to save for their children's education.
"Investors recognise the locked-in value of many endowment policies and are keen to invest in a vehicle with a known maturity date and a minimum guarantee.
"However, it is important for the original policyholders to be aware that they could lose out by giving up a valuable investment and all endowment policyholders should seek advice before they sell their policies," Mr Goldstein said.
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