endowment advice

madmizzy33

Hi, when I phoned aviva all they told me was the surrender value and the 3.61% final bonus. do I need to phone and ask about the mortgage promise value. many thanks for your advice.
Also EdInvestor. when you say 'the loss would be higher' do you mean the shortfall will be more?. thank you for your advice.

dunstonh

do I need to phone and ask about the mortgage promise value.

yes. With Aviva, it can make the difference between a keep or dump decision. Some have been in the tens of thousands of pounds. Yours is likely to be lower but it could potentially be enough to see yours come in on target.

HarveyGal

@madmizzy33
I have an Aviva with profits endowment policy that is due to payout in June 2013 (original target value was £59K, 25years of ££77 per month).
The mortgage promise value is a sum of money that Aviva have said they MAY pay (if they can afford to depending on how well some fund is doing!)...the sum is a maximum, for my policy, of £8.8K. This sum is something like 90% of the identified short fall in expected maturity value, from when the endowment was first identifed as failing, in 1999, I think.

Aviva have said they will inform me if I am to recieve this money three years before the end of my policy. I spoke to them recently and was told that so far they had always paid this money. They should be able to tell you what your mortgage promise value might be.

Mine does make the difference and I am hanging on to my policy.

Good Luck.

dunstonh

The mortgage promise value is a sum of money that Aviva have said they MAY pay (if they can afford to depending on how well some fund is doing!)...the sum is a maximum, for my policy, of £8.8K.

The "may" is in respect that of the fact that if it hits target they wont pay it. Its only if in shortfall. And they will only pay the amount to hit target or the full MEP value, whichever is lower.

This sum is something like 90% of the identified short fall in expected maturity value, from when the endowment was first identifed as failing, in 1999, I think.

It was taken from the shortfall at the 6% projection on the 2001 statement and capped in 2004.

The MEP is fully funded assuming the worst (from Aviva's point of view).

madmizzy33

Hi. I have just phoned Aviva and been told that I don't have a 'mortgage promise value' but if my policy matured today it would give me 25% on top of the total unit value. so £5,995 + 25%. so now do not understand what the 3.61% final bonus is. I have also paid £15,000 off the mortgage to cover the shortfall so far. thankyou

EdInvestor

madmizzy33 wrote: »

Also EdInvestor. when you say 'the loss would be higher' do you mean the shortfall will be more?. thank you for your advice.

Yes..................

dunstonh

madmizzy33 wrote: »

Hi. I have just phoned Aviva and been told that I don't have a 'mortgage promise value' but if my policy matured today it would give me 25% on top of the total unit value. so £5,995 + 25%. so now do not understand what the 3.61% final bonus is. I have also paid £15,000 off the mortgage to cover the shortfall so far. thankyou

Your endowment couldnt have been off track back in 2001. Or its not one of the CGNU policies (i.e. yours could be from one of the companies that Aviva bought up over the years).

Terminal bonuses have the potential to change daily. It may have been that yours was 3.61% when you first called but is now 25%.

wrenlegs

Just out of interest...

Last year I read on these mortgage boards that there was a possibility that the terminal bonuses for endownments could be surprisingly high (something to do with the idea that so many people have now cashed them in/sold them). We decided to hang onto our Phoenix endownment. It will end in 2015. It was to pay off 35k (with all the bonuses and stuff its currently at around 17k) - I worked out that the worst that will happen is that it will have been like stuffing our cash under a mattress - i.e. we havent actually 'lost' money. When I heard about the possibility of a big bonus we decided to gamble. Has anyone heard anymore of these terminal bonuses?