Mis sold mortgage? or what next?

Eric_Crapton

I have been corresponding with an insurance company (Not sure if I can name the company?) since June this year in respect of an endowment mortgage sold to me in 1989. It’s rather involved but to keep things as simple as possible, these are the basic details:

I sold the property and the mortgage was discharged in full in 1993.
I paid the last premium in the same year.
I presumed the policy became a fully paid up policy.
I have been informed the policy has a non-forfeiture clause!
I moved to the Isle of Man in 1994 and forgot about the policy.
I plan to retire and move abroad in 2011. I am trying to get my finances in order.

I have been informed by the insurance company that I was sent correspondence to change the status of the policy to a fully paid up policy at the time (I never received that correspondence!)

The clause section at the back of my policy has no mention of a non-forfeiture clause.
Instead the clause referred to reads: unpaid premiums!

In my correspondence to the company I have pointed out all the above points and stated if all of the above information had been made clear to me at the time of taking out the policy I would have declined.

I have to point out that the company, were not that helpful in as far as I was mislead by the person I initially contacted by phone but have softened to the extent that they have sent me a cheque for the sum of £50! I told them in no uncertain terms I consider it to be a bribe and informed them that the cheque would not be cashed and held for future reference! The company have now informed me they are unable to uphold my complaint and sent me documentation so I can refer my case to the Financial Ombudsman Service.

During the lifetime of the policy I paid in a total of £2088. I have been offered £345.25! The reason given by the company is as follows:

The policy lapsed on December 1993 due to unpaid premiums. Premiums were advancing as a loan on the policy under the non-forfeiture clause. The non-forfeiture clause provides that in event of non-payment of a premium, it will be advanced (provided there is sufficient value in the policy) in the form of a premium loan rather than allowing the policy to lapse. As eventually there was insufficient value left in the policy, the policy lapsed. The exgratia value available is £345.25.

If anyone has/is going through or knows of a person who has encountered a similar situation, I would really appreciate their input. Sorry this post is so long but if I were to include everything it would stretch to at least five A4 pages.