Surrender Values and Terminal Bonus

Hello all,

I have a question about surrender and maturity values of a Clerical Medical with profits 25 year endowment policy that has just matured.

In August 2015 I checked and received a surrender value for this policy of £16,640.

In April 2017 I received a maturity figure which, less the terminal bonus, was a lot less than this.

I sent the following to Clerical Medical...

On 20th August 2015 I received a current-at-that-time surrender value for this policy of £16,640. This was just for my information at the time. Obviously as a surrender value before the end of the policy it would not include any terminal bonus.

In the 20 months or so of the policy since then, whilst continuing to pay monthly premiums and whilst I would have expected there to be at least some kind of growth in the value of the policy even if just a token amount, I am left with a policy that, without the terminal bonus, has fallen in value from £16,640 to £13.957.60 - a loss of £2682.40, or just over 16% of its value.

Their reply - which I spent two weeks chasing up, was...

Although the full benefits are only payable on death or maturity, all of our surrender values do include some allowance for an element of terminal bonus. While we cannot provide an exact breakdown of the surrender value previously quoted, in broad terms this value was made up of a discounted percentage of the guaranteed endowment sum assured and regular bonuses to date, plus some allowance for any terminal bonus. The true comparison is therefore between the surrender value quoted and the total amount payable at maturity and this does show a modest increase in value.

This idea of a surrender value including an element of terminal bonus is a new one on me and I can't find any mention of it anywhere.

I don't have illusions about endowment policies - this was designed to pay £28,500 and I know we will fall well,well below that in any event.

I don't hold out a great deal of hope about this but before I give up I thought I'd try asking some experts. Any suggestions gratefully received.