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Aviva - Mortgage Endowment Promise is 'not applicable'
Comments
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I have just received notification of the bonus added to my endowment on 31st December 2011. It is just .50% of all previous bonuses, and comes to £29.61. As my monthly premium is more than this, I thought it must be a mistake. I called Aviva and was told it is correct. The policy matures next year, and has a large shortfall. I will (hopefully) receive the maximum payout under the company's shortfall "promise". Is it possible that Aviva are reducing bonuses on policies that will receive the maximum "promise" payout anyway?0
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Is it possible that Aviva are reducing bonuses on policies that will receive the maximum "promise" payout anyway?
More likely that as the stockmarkets had a negative year, they could not add money during a loss period.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
You make a fair point, but I cannot remember a previous year when reversionary bonuses were so low - not even 2001 or 2008, when the markets collapsed. Do the companies not normally apply MVAs when markets have a bad year?0
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You make a fair point, but I cannot remember a previous year when reversionary bonuses were so low - not even 2001 or 2008, when the markets collapsed. Do the companies not normally apply MVAs when markets have a bad year?
Different companies apply the MVR in different ways. Aviva tend to remove final bonuses before they apply an MVR if they can. Pru tend to apply an MVR but leave final bonuses as much intact as they can for example.
Since the solvency issues came to light after equitable life, all life companies started to reduce the annual bonus and push the return towards the final bonus. Plus, at the same time, they were more or less pushed into selling equities at the wrong time and buying lower risk assets. Assets that tend to provide lower returns. So, nowadays you see very little return in the annual bonus and it will be the final bonus where the action is (in either direction).I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
I'm pretty much in exactly the same situation as the original topic opener.. I have a NU Flexible mortgage plus with lifetime benefits taken out in 1994. Looking at the documentation, it's 100% invested in the Aviva balanced managed fund (NU).. whatever that is.
I've not had any of the problems the OT had, not switched anything, never had any cockups with payments, I just let it run.
I also remember reading about the 'promise' then being quite shocked a few years later learning from Aviva that I didnt qualify.
These endowment products seem to be a law unto themselves and I'm pretty much resigned to getting sod all back at the end!0 -
These endowment products seem to be a law unto themselves
No. They are very fixed and rigid in their terms. Indeed, that is part of the problem. Modern products are far more flexible and can be made to adapt. Endowments could not adapt and that is why they died.I also remember reading about the 'promise' then being quite shocked a few years later learning from Aviva that I didnt qualify.
You are invested in the Balanced managed fund. So, you didnt qualify for that reason.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
I realise that this is a very late reply, however I have only just been made aware of the issues being discussed here.
It is probably too late for specific advice, but I just wanted to make you aware of the Norwich Union Policyholders action group, where lot of the issues surrounding Aviva (and other finance industry miscreants are discussed). If you search for NUPAG you will find the google blog which we call home.
There are a number of very well informed people who are continuing the fight with Aviva and other insurers and all contributions are welcome.0
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