advice wanted on endowment

Carolyn2

Hi. I wondered if anyone could offer me any advice on my endowment situation.

We took out an endowment with countrywide assured in 1992 to cover a mortgage of 52100:-

Sum assured 25775
maturity date 2013
monthly premium 60.19

This endowment was supported by another one from Standard Life for 26325. In 1998, we sold this standard life policy {stupid I know!} and contacted countrywide assured to ask them to increase our cover up to 52100 and to extend the term for another 5 years – this took us to:-

Sum assured 52100
maturity date 2018
monthly premium 89.12

After getting a red letter I read up on it from this site and decided to send off a letter for being mis-sold the policy. They came back and have offered us 5545.86 and asked us if we would like to cash in the policy at the same time for 10945. The re-dress figure is against the initial sum assured of 25775; I’m assuming that as we extended and increased the policy ourselves we do not have any redress. {We were extremely foolish as we were still acting on information we had, or had not, been given for both the sales of the standard life and the countrywide policies, and hence didn’t realise we were compounding our problem}

The last red letter we had put our policy at the following projected final amounts:-

4% 25400
6% 31600
8% 39200

So my question is really, should I cash in my policy – my future premiums will be 13635 according to my letter from them, which added to the 10945 they’ve offered makes 24580 ?

Any thoughts/help greatly appreciated.

anna28_2

I haven't got advice for you on the subject as I am in similar situation.I am with counrtwide assured and my endowment projection is very similar. But I do have a question-when you applied for compensation,did you apply to the estate agents on the High st(Bairstow Eves?), their head office or Countrywide assured direct? Thank you.

Carolyn2

Hi - I just sent a letter to Countrywide Assured directly. I was sold the policy by a financial advisor who was somehow connected to the estate agents I used {Bridgfords}, but I couldnt remeber any other details so I just started with Countrywide who took it on anyway.

They send me first all the documentation they had on my case and then sent me a huge questionnaire to fill in. I did intend to complete the questionnaire, but didnt manage to in the end {despite a reminder phone call from them!}

I sent my letter at the end of Jan and got an offer letter from them last weekend.

I've decided that I will cash in the endowment and put the money into a savings plan as I think that's safer - from reading the threads I think I should put what I can in tax free isas in both our names and the rest in best savings account - I'm going to make sure I get life cover sorted first though.

Good luck with your claim!

EdInvestor

It would be more sensible to use the surrender proceeds to reduce the mortgage. This would give you a return equivalent to your mortgage interest rate, which is almost certainly higher than any interest you would get on savings.

Carolyn2

Thanks for the advice - I see what you're saying, but we've just remortgaged and put ourselves on a 5 yr fixed rate with the nationwide - I think I may have to check whether we're allowed to overpay? Another quick question - am I obliged to inform them when we have cashed in our endowment, or do I need to ask their permission first? Our mortage is 75% repayment and 25% endowment.

Any advice/thoughts greatly appreciated.

EdInvestor

Carolyn2 wrote:

Thanks for the advice - I see what you're saying, but we've just remortgaged and put ourselves on a 5 yr fixed rate with the nationwide - I think I may have to check whether we're allowed to overpay?

Yes.If you take the money and put it on deposit at a net 4% over the period also paying in the premiums to maturity, you would end up with 42,796. At 5% the total would be 47,072. So a higher rate is significant, if you can't overpay, try to get the money into ISAs.

Another quick question - am I obliged to inform them when we have cashed in our endowment, or do I need to ask their permission first?

Not unless the policy is "assigned" to the lender, which wouldn't normally be the case with a new mortgage.