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Surrendering policies makes no sense, says Neville James

With-profit endowment policyholders surrendering their policy after five years or more are losing out by up to 30 per cent, according to figures from Neville James.

This month Neville James paid £8,550 for a Clerical Medical policy with a surrender value of £6,245, a mark up of 37 per cent. It also paid £20,000 for a Royal Life policy with a surrender value of £16,839, a mark up of 19 per cent.

Neville James marketing manager Annie Lee says: “Because of the way with-profits are structured, the underlying value of the policy is nearly always higher than the surrender value.”

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