Endowment as a savings plan or keep trying with our case?

Nubs_2

We took out our mortgage in '97 and as FTB we were sold a Norwich Union endowment policy. We were complete financial newbies and bought lots of other stuff from our IFA. We were told it was the 'flexible' option...you can move house with it. Just two years later we decided to change from endowment to repayment mortgage...I can pay as much or take payment hols...so what did he mean by 'flexible'. We now feel stuck with this policy.

We've kept it on as a savings plan with life cover. Could we just get a cheap life cover (like we buy most things...on the net? What do we need to look for in life cover?)
We tried to put a case together, the IFA's firm returned a verdict this month saying we don't have a case as we were given all the 'illustrations.'

We think should cash in (or do we?) as the £100 odd a month would do nicely in the mortgage. As I don't work any more the money is not the small amount that it seemed when we both worked.
What should we do....
1. Keep it as a savings policy with life cover?
2. Cash in (would 'lose' 2K over the period...paid in (9K worth 7K)
3. Wait for till next year (will be 10 years of holding policy) then go cash in through a company that buys them. They won't look at us now.
4. Or should we perserve with the case and take it to the FSA (Ombusman)?
5. Keep it, see how ir performs

Please help...Mum of two at home with the kids... trying to keep the finances in order.

dunstonh

1. Keep it as a savings policy with life cover?

You have told us nothing about the investment so how can we comment on its suitability?

2. Cash in (would 'lose' 2K over the period...paid in (9K worth 7K)

As per above, we dont know the costs vs growth potential over the term compared to alternatives.

3. Wait for till next year (will be 10 years of holding policy) then go cash in through a company that buys them. They won't look at us now.

Is it in an investment fund that a TEP company would be interested in?

4. Or should we perserve with the case and take it to the FSA (Ombusman)?

If you believe their response is factually incorrect then you can do so.

5. Keep it, see how ir performs

If its a good one, then maybe. If its a bad one, then why throw good money after bad.

Endowments are not all bad. Some are very very good. Some are disgracefully bad. The average consumer isnt in a position to know which is which. This is why we have seen so many good ones get surrendered and have so many people holding on to bad ones.

We need to know more about the endowment to see which of the 5 usual options applies.

Nubs_2

I hope this additional information helps...

Norwich Union Low Cost Endowment with profits - 25years (1997)
For 60K mortgage.
Includes Critical illness, Premium protection and Moving house option.
Life cover benefit - £37,560 (decreasing term - without
profits sum assured)
£22,440 Endowment (with profits)

Cost per month - £105

What we might get back after 25 years:
5% = 43K
7.5% = 60K
10% = 82K

Taggie

I am in exactly the same position, also have the same amount of policy with the same company!!!!

It was for £60,000 and our mortgage when we moved is actually now £72,000.

We took ours out in 1994? and at the time they said the with profits fund could pay it off in 2015, whether this is likely or not, remains to be seen, but nethertheless, we have been paying for it for 11 1/2 years.

We have already started to put money into a cash isa for the shortfall of £12,000

but wonder now what would be the best way to proceed as our discount rate has finished.

So basically, we are after the same info as you Nubs, so if anyone can help us, it would be appreciated :beer:

InMyDreams

Another option (which is what we've done for now while we consider our options) is to keep the plan as a savings plan, but reduce your premiums to the bare minimum. It tooks us almost a year after we changed from an endowment mortgage to do this, once we realised how crippling the extra payments were per month, and then I was horrified to realise that from our premiums, we'd also been shelling out for extra insurances and stuff that we no longer needed as it was no longer intending to pay off a mortgage (to the tune of throwing away about £30 a month). So the £30 charge to change the premium amount was recouped in one month.

I'm still undecided what to do with it. It still isn't worth as much as we've paid in. But I've been keeping a really close eye on it for the last year, and had I cashed it in and paid it (plus eqivalent premiums) into a savings account for the last year, I would be even worse off now. (Even taking into account this week, when the floor seems to have dropped out of the bottom of it - eek)

Nubs_2

We have kept the policy on as a savings plan and continue to pay into a repayment mortgage separately. We too discovered after looking at our paper work in detail that it included lots of other 'options' which I can't remember specifically asking for at the time but hey it's our word against theirs and we signed on the line didn't we?! We asked NU if we could change our premiums to reflect our change of circumstances (i.e. we no longer need the moving house option) they said no...I will try again InMyDreams as I think £30 isn't alot considering the time we have left.
We are thinking we could do with the extra £100 odd to go into our mortgage to pay it off quicker.
I don't know...I'm none the wiser. Thanks anyway for the replies so far!

EdInvestor

Post the following info about the endowments for a view:

Which company

Guaranteed sum assured
Declared bonuses
Surrender value
Monthly premium
Maturity date
Maturity projections