Change to endowment policy 'smoothing'

whickhamlad

Just received a letter from Clerical Medical to advise me that they intend to reduce the amount of 'Smoothing' they apply to the final bonus of Endowment policies. My policy already has a substantial shortfall (complaint pending with FSA). My policy is due to mature in 6 months, how after 22 years of my funds being used to smooth bonus payments can CM change this. Smoothing is supposed to balance the effects of the investment through the whole cycle of the policy and was regularly referred to as a key part of the policy investment strategy as being a fair way to give returns to investors. Now this has been changed and if your policy is due to mature in poor conditions such as exist now the return will be lower.
Has anyone else been subject of this change, can endowment firms do this?
Appreciate advice.

EdInvestor

You are not alone, unfortunately insurers can do basically what they like in With profits funds.

Suggest you get some figures

Guaranteed sum assured
Declared bonuses
Surrender value
Monthly premiujm
Maturity date
Maturity forecasts

Interest rate payable on mortgage.


You may be wise to go early.