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Terminal Bonus and death before maturity

Dear all,

Sadly, my father died only a few weeks before the maturity of his life assurance endownment policy with Scottish Life on the 1st of March 2010. It would put my mother's mind at rest greatly if someone could tell me if this will affect the terminal bonus. The policy has been in place since the 1960s.

Thank you so much for taking the time to read this.

Tom

Comments

  • dunstonh
    dunstonh Posts: 118,015 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    There are different ways of doing it. The two main ways are:

    1 - the sum assured or the current value, whichever is the highest
    2 - the sum assured plus investment element

    I would guess that she has an old industrial branch policy which will have two sum assureds. One paid out on death and a lower one that bonuses are added to. Once the latter exceeds higher sum assured the higher figure would be paid out.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • Hello,

    Thank you so much for replying so quickly.

    There statement informing us about the maturity date contained the following:

    Basic Sum Assured (third of the declared bonus)
    Declared bonus additions (half the terminal bonus. equal to the total bonuses declared since the policy started)
    Interim bonus additions (negligible)
    Terminal Bonus Additions (the most)

    I presume that the terminal bonus would be termed the 'final bonus' if we had surrendered the policy before the death of my father. My fear is that my mother will get nothing or a lot less of this payment.

    Thank you again. It's really very kind of you to help at this time.
  • dunstonh
    dunstonh Posts: 118,015 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    I presume that the terminal bonus would be termed the 'final bonus' if we had surrendered the policy before the death of my father. My fear is that my mother will get nothing or a lot less of this payment.

    It is the type of thought it was. She will get the basic sum assured, plus declared bonus dditions, any interim bonus and the terminal bonus as long as its higher than the full sum assured (which is the minimum pay out).
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
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