Royal London - With Profits Endowment Plan.

Daddyto3

Hello.

I have tried to read a lot of other posts, but can't quite get my head around insurance (!)

We have a policy taken out with Royal London on 1st June 1998.
I have the policy booklet here, and it's called "Regular premium with profits endowment plan"
We have religiously never missed a payment of £38.35 per month.

At the time which is coming up to 8 years ago, we were led to believe that this is a life insurance on our (Repayment) mortgage. So basically if either of us passed away the mortgage would be paid, or if we both survive then we would have a lump sump, think we were quoted about £70k ????

The questions I would like to pick your (intelligent) brains about are;-
1.) Is this above true
2.) Going off the current stockmarket, are we still "up"?
3.) Is it better to hold on to the policy, or move it somewhere else/get life assurance with someone else?

As you can tell, we really havent a clue, what the policy is for, whther we are throwing £40 a month away, or what we should do.

The most recent statement I can lay my hands on is 2004, though havent a clue what any of the amounts mean?

Many thanks in advance for any replies.

dunstonh

1.) Is this above true

You have the policy document, not us.]

An initial guess would be that you are wrong. £70k sum assured on an endowment would cost more than £38.35pm.

2.) Going off the current stockmarket, are we still "up"?

You are not directly invested in the stockmarket with all the funds. Or even the majority of the funds. 8 years into 25 year term (assuming 25 years), and just after a crash which has yet to fully recover, it is unlikely that you would have broken even yet, let alone make a profit.

3.) Is it better to hold on to the policy, or move it somewhere else/get life assurance with someone else?

Depends on whether you need an investment vehicle to repay the mortgage or just pure life cover. It would also depend on the features, benefits and terms of the existing plan.

I suggest you find out what you have first. RL service is pretty dire but they should be able to confirm the basics over the phone. They do issue quite a good policy summary by the post. Although you can wait a long time for it to arrive.

Daddyto3

Many thanks for your reply.

I have spoken to Royal London as you advised, and they say it is a "Confined Endowment & life protection policy".

She confirmed that it's a basic, if either partner dies house will be paid for, but on survival (1/6/2023), there would be a guaranteed value.

As per last statement;- The basic guaranteed value with bonuses added to date. The minimum amout we guarantee to pay on maturity (or death if earlier) would be £10,193.75
(that won't be much in 17 years will it?) - is this after another 17years at forty quid a month?

Anyway just out of curiosity I asked if I was to surrender what would i be likely to get back she said as of today the figure stands at £2,539.16.

Quick maths calculates I have paid £3068.00 to date.

I don't know what to do.?

At the moment the most important thing for us, is to make sure that either of us passes away, then the house will be paid for.

Although a nice sum in later years would be nice it will have cost me in the region of £11k.

Would really appreciate your advice?

Daddyto3

....or anyones advice?

Many thanks

Little_Miss_Winner

HI,

Up to now you have lost £400 ish. I am unsure whether it would be wise just to surrender it? What about seeling to a company who buys endowments? Dunno if you would get any more though.

£40 a month is a lot when sticking to a budget, but I really don't know much about endowments, perhaps someone with a bit of expertise may be along soon....

Welcome to MSE, by the way!

pot

dunstonh

I did a review of a client who used to have a refuge/United friendly insurance man and had around 12 policies. After review, all but 3 were better off being replaced. So, its not really something that can be answered without a full policy details sheet from RL.

Although I cannot tell you what to do, even though I know in my own mind what would be likely, I would suggest you use the lowest projection figure as the most likely. That should help steer you to how I am thinking. To be sure though, you could get an IFA to do a policy review for you.

payless

yes you are best to take advice from an IFA
( more likely an old school type that understands regular premium WP policies)

How much is the mortgage you thought was covered - have you checked that mortagge is actually repayment basis ?

policy sounds like a pure endowment savings , but poss low cost mortgage endowment .

some providers showed LCME as 2 policies in one - the endowment bit ( gives guaranteed amount on death or maturity, hopefully increasing as bonuses added) and a decreasing term assurance ( to top up the life cover to a set amount - say the mortgage amount)

that said yes premiums look low for a £70K policy, maybe more like £25-£35K target ( with £10K initial life cover or £25-£35K life cover if includes the top up life detailed above)element) , if £70K was mentioned , thats more like what £38 pm policies might have been maturing at at time of sale ( not now!)

Daddyto3

How much does it cost to hire a IFA, wher would I get one, just out of the phone book?

(sorry if I sound a bit thick!)

dunstonh

How much does it cost to hire a IFA, wher would I get one, just out of the phone book?

On commission basis, nothing directly although the premiums would be a couple of pound higher a month. On fee basis, rather than commission anything ranging from £75 per hour to £500 an hour depending on the qualifications, experience, location and status of the advisor.

Little_Miss_Winner

I was always wondering this too, so thanks dunstonh.

Daddyto3

You have the policy document, not us.]
An initial guess would be that you are wrong. £70k sum assured on an endowment would cost more than £38.35pm.

According to the policy schedule; Sum Assured; commencing at £35,000 with profits.

As per last statement;- The basic guaranteed value with bonuses added to date. The minimum amout we guarantee to pay on maturity (or death if earlier) would be £10,193.75
(that won't be much in 17 years will it?) - is this after another 17years at forty quid a month?

Or will it be guaranteed £35k, am so confused!

Still don't know what to do???? Whether to keep or surrender.

Help!
Phil