CIS With-Profits Fund - what to do?

polybear

Hi all,

I've had a W.P Endowment fund with the Co-op since April 1991, paying £23-10 per month for 20 years (sum assured is £5000). In mid 2007 I changed bank account and the resulting confusion with direct debits etc. meant I had to pay several instalments to the Co-op by cheque before the new direct debit kicked in.

However, despite the Co-op initially receiving an instalment via the new Direct Debit in September 2007 (proving it was set up correctly) it appears they then failed to continue requesting the money every month. I've just had a letter from them saying that because no payments have been received for a year they are now making the Policy a W.P Paid-Up Policy, with a sum assured of £4120-00. After contacting them via phone they initially said that this cannot be reversed, but after further investigations on my part and a second telephone conversation with them it does appear that they are realising it may be them at fault. There may be the option of sending them a lump sum payment to cover the missed monthly payments, then continuing until the normal maturity date of April 2011 (I've still to verify this option though).

Currently they have just told me that if I cash in the policy now it will be worth £6990 (which by my own calculations equates to an interest rate of 4.78% over the period of the policy so far). Alternatively if the policy remains in force until the normal maturity date it has the following estimated benefits at maturity: £6670 (4% per annum) and £7450 (7.5% p.a.).

Any advice as to what to do please, i.e.
1. Take the money and run (or perhaps sell the policy to another company - any suggestions as to who?). If so I could then consider putting the money into (e.g.) a FTSE All-Share Tracker ISA in April, now that the stock market is low (and hopefully won't go lower!)
2. Leave it until April 2011 as a paid-up policy?
3. Argue with them that the policy should be re-instated, which will mean paying a lump sum to them (approx £400) and then continuing as normal until 2011?

I don't need the life assurance element, nor is the policy linked to a mortgage etc. in any way. It was originally taken out as an investment.....I won't be doing that again!!

Many thanks.
Brian

dimbo61

Do you have a mortgage or other debts ?
The endowment market is pants at the moment and shares are having a roller coaster ride as well.
ISA,s paying poor rates as well
Take the OH on holiday to Lake Garda, venice, verona for 2 weeks
This is only my opinion ( PS if the wife wont go TAKE ME !! )

polybear

Thanks for the reply. No mortgage, no debts (yippee!!).

Brian