camk

I've just had a 10 year policy mature and its only paid out 3066 against a sum assured of 4400. My total investment over the 10 years was £3187. Anyone on here had a successful complaint on misselling. I was sold the policy to fund a mortgage for repairs to my grandparents house. It seems that generally endowments are not good for short term investments and for small amounts like this then it would seem crazy. LLoyds TSB BTW. Note to moderators, all facts above

Cheers
Cammy

Kevin Greeley

You may have invested £3187 over 10 years, but a proportion of that has been used to cover the life insurance (this is not recoverable).

So say £2000 was actually invested to give £3066 at maturity. Not too bad?

Did your policy give any indications of maturity value?

Dave T-S

Investing in the equity markets is not for the faint hearted.

It was fine when equities were recording meteoric growth, but like the housing market it is all built on sand. What goes up will eventually come down.

Even at today's close (4322.36) the FTSE is way ahead of the 1994 low of 2876.6 (furthest back the FTSE website records go).

There are too many factors involved - nobody would have predicted what happened on September 11th last year beforehand for instance - to make endowment policies any more than gambling. Ten years ago however they seemed much more secure.

Check on the FSA website re misselling.

Tiggs

2 issues- the growth, you cant claim misseling cause u got poor growth- you werent sold a definate X% return so tuff luck (unless u can prove that u were told it was a sure thing)

brendy

To be fair anyone with common sense can figure out that these investments are not good for short term due to charges.
Why did you get a 10 yr policy??

fatherpierre

The only way to sue or claim is if you were given a guaranteed minimum amount of return. I too took out a savings plans in Nov '92, but that had a minimum return in it which I'm **** nipping on right now!

I've got the original guarantee slip though that has a V good return on my investment.

Trout...

It's also very bad at the moment as program trades and hedge funds have accelerated the downturn in the equity markets. This in turn has forced Life Companies to sell there equities to ensure that they remain solvent. The equities represent what is called the free asset ratio - that is what funds the terminal bonus in your endowment.

The free asset ratio for almost all Life Companies is now at an all time low - in fact many Life Companies are only just solvent - and that only because the government changed the rules recently so the industry did not go bust.

This could not have been predicted even a year ago - the main problem being excellent equity growth for nearly 30 years has seduced the Life business to focus on the stock market. More recently there has been a shift to Corporate Bonds - but it is too little too late.

You would struggle to claim misselling - there is almost certainly a part of the policy that will explicitly state the risks of being in an equity or unit based endowment.

Your best shot would be to challenge why you were sold an endowment at all - any endowment of less than twenty years has risks around the return - they are much better at long term investment than short term, i.e. ten years or less. Over that period a high interest savings vehicle probably would have been a better choice. But at the time the equity markets were the place to be.

Check out the FSA website - they have advice around endowment misselling

www.fsa.gov.uk

Trout

sasim

Just worked out today how poorly my endownment plans are fairing, basically after 13 years I find that I have paid more in than it's worth, and in 2014 it will be a whopping £18K short of the target of £45k, and that's at 6% growth.

Stuart

logiclee

As far as I understand it if you were sold a policy and were not warned that it may not pay off your total debt it could be classed as misselling.

Standard Life are chucking millions into their endowments at the moment to try and steer clear of a massive law suit. Most people in the late 80's were sold policies on the basis that it WOULD pay off your mortgage with bonuses on top. If the seller failed to disclose that it may not pay off your debt you may have a case.
The big companies are running scared, even if they are covered by the small print a Jury may have different ideas.

Lee

Tiggs

"Errr, how? "

because it sounds like a low cost end. not a traditional end, therefore the sum ***. (death benifit) may be more than is finaly achived as a payout on maturity.

T

Trout...

Agree with Tiggs - the sum assured is the term assurance element of the policy - not the return.

And let's face facts here - 10-15 years ago returns on endowments were so staggeringly high, along with a long period of relatively high interest rates - that everyone thought that endowments were a good thing - huge terminal bonuses were promised - and salesmen and punters alike were lapping them up.

As I said above - your best port of call is the FSA - the Financial Services Authority who regulate the Industry - they have recently started to look very seriously at endowments - so check out their website for advice.

Finally - it's not only Standard Life piling millions in - the majority of Life Offices are doing it - however the reality is it is not a good thing - it just means that the money is coming out of other investments like your pension - or other long term vehicle.

Trout

Huge

Cammy,

If you don't desperately need the money now could you not avoid cashing in the policy now but wait until the stock market picks up (assuming you think that it might)? The units underlying the policy may then rise in value, possibly at a greater rate than leaving the money in a savings account.

Plenty of people have cashed in policies at term and received poor returns - even though with most you can continue to hold them, albeit without the life cover element - only to see substantial growth soon afterwards. However, prices could of course drop back again

Personally I'm concentrating on paying down my mortgage at the moment, with a more limited input into the stock market than previously. However, many investors made good money in the aftermarth of the stock market crashes of the 70's & late 80's.

Hugh

uncle buck

I got ripped off with an endowment mortgage too [img]images/smilies/mad.gif[/img]

I found when I tried to sell the endowment that because it is a 'unitised' policy no-one will touch it

I've just cashed it in for it's current value as I can't see interest rates rising in the foreseeable future and I'm sick of shelling out each month to keep it going.

I could have stopped paying in and just sat and waited, but I reckon investing the cash into property will yield a *far* better return.

camk

Huge,
I'm not cashing it in early. It was only a 10 Year policy so its fully matured.

Regards
Cammy

Huge

Cammy,

I appreciate that, but you don't, I would think, necessarily have to take the cash now - can you not just hold onto the underlying units?

H

camk

Both with Standard life and I think they 'currently' have a guarentee that they'll pay out the amount assured on endowments. This if course can change as someone pointed out above. Ever feel like you've been had over ? There must be loads of people out there in a similar position given the popularity of Endowments in 80's and 90's. Dammed if you keep em , dammed if you don't. Could be worse I suppose, could be Equitable Life...

Cheers
Cammy

Daryl

I complained to my endowment provider about the way it was sold to me (1991) and they agreed with me! They stated "We are not persuaded that this policy was entirely suitable for your needs, as your attitude to risk was not suitably explored".

They have now compensated me in line with guidance provided by the FSA.

So it may be worth writing to them.

Tiggs

someone spare a thought for us advisers, we cant swan around in £500 suits like the old days anymore

T

sasim

Daryl,

Any chance you could send me an E-Mail to sasim@scoobynet.co.uk with your current E-Mail address, I would like to ask you some questions about how you made your claim

Stuart

camk

Brendy,
Thats exactly my point, WTF would they sell me an Endowment policy for a 4400 home improvement if not just to sell a endowment.I was told at the time that they had to use conservative(sic) figure of 7% for growth but I oculd expect to at least double my money. The idea of longer term investment like this is surely to smooth out the ups and downs, we're only now at the end of the biggest Bull market in Financial history, obviously none of thats been banked.
The main point is surely a better vehicle would have been repayment or straightforward loan, rather than a 10 year interest mortgage and endowment. They told me 10 years was long enough as it was such a low amount.

Kevin,
Do you not think 110 quid per annum for 4400 of life cover for a 23 year old(at the time) is a bit on the high side .

Cammy

[Edited by camk - 8/10/2002 11:54:39 AM]

BugEyed

Errr, how? If the policy has a sum assured then this is what it will pay out as a minimum, plus bonuses as appropriate.

Alterntively, you may have had a policy with a lower sum assured and a projected sum assured of the higher amount. In this case, the comments above apply - the returns over the last 10 years have been poor and you have lost out. But, were these risks explained to you when you were sold the policy? If not, ask for a copy of the fact-find that was conducted upon you when you were sold the policy. This should explain why the policy was appropriate for your needs and how any risks associated were explained to you. Might make interesting reading.

Ask the questions, as you might get some useful information.

Duncan

aka. A person who has had to sort this kind of problem out in the past.

[Edited by BugEyed - 8/10/2002 9:47:13 PM]

camk

not sure...good question Although I'm tempted to take the cash as I've 2 other Policies total assured(sic) is 140K on them with 12 and 7 years gone on 25 year policies. You can get too much of a good thing....

[Edited by camk - 8/12/2002 1:50:22 PM]