Terminal Bonus rates

welnik

Can anyone help point me in the direction of a good place on the internet to find a comparison of terminal bonus rates for the major insurance companies?

I've a Clerical Medical endowment maturing in a couple of years and I'm wondering what the terminal bonuses are like? I have a shortfall of £20,000.

Mollina_Girl

Hi welnik,

I have a Scottish Widows endowment which matures in July of this year, there is a shortfall of approx £7500. I rang them and asked about the terminal bonus and was told it would be very little.

The plan was to cover a £20,000 mortgage and is currently £12,531. The terminal bonus on this will be £614:eek::eek:

Sorry to give you this bad news.

rdpeat

I can only confirm the bad news from Mollina Girl. Our 25 year, low-cost, 47 pounds a month endowment policy with Clerical Medical matures in early July this year. In two weeks time, in fact. It will pay out about 21k as confirmed in a recent letter. A 9k shortfall. Terminal bonus = zero. Later policies will no doubt be even worse.
Out of the blue, Lloyds-TSB bank, who loaned us the money and arranged the endowment while churning us out of a perfectly good repayment mortage, has unilaterally extended the repayment period for all or part of the loan for a further year. I won't be taking them up on the offer, but a similar arrangement could help others.
After the first few years it became very difficult to get information about current terminal bonuses from Clerical Medical. Searches on the web about the general level of current terminal bonuses yielded results on 50 GBP/month endowment policies proved not to apply to my policy, i.e. they overestimated the final terminal bonus.
Still, the mortage rates were 15% when the policy was taken out and had a similarly high rate of inflation continued for 25 years it would have meant that the promised big bonuses would not have bought much anyway. And we've enjoyed lower mortgage repayments for the last two decades too. Looking back, we should have put more of the savings from the lower mortgage interest rates back into paying off the loan.

The fizzy wine is already in fridge to celebrate. I'll just pleased to get out of it before the 21k mysteriously disappears.

judygarland

rdpeat wrote: »

I can only confirm the bad news from Mollina Girl. Our 25 year, low-cost, 47 pounds a month endowment policy with Clerical Medical matures in early July this year. In two weeks time, in fact. It will pay out about 21k as confirmed in a recent letter. A 9k shortfall. Terminal bonus = zero. Later policies will no doubt be even worse.
Out of the blue, Lloyds-TSB bank, who loaned us the money and arranged the endowment while churning us out of a perfectly good repayment mortage, has unilaterally extended the repayment period for all or part of the loan for a further year. I won't be taking them up on the offer, but a similar arrangement could help others.

The fizzy wine is already in fridge to celebrate. I'll just pleased to get out of it before the 21k mysteriously disappears.

In the end I telephoned Clerical Medical to ask what terminal bonuses they are currently paying and they quoted 9%. Are you sure yours is zero? My policy is a low cost with profit endownment. I qwonder if yours is something different that doesnt attract a TB?

dunstonh

Clerical medical have several with profits funds. Each with different returns depending on the asset backed ratio.

Teminal bonuses are also dependent on timescale and how much money has gone in at various points. i.e. money paid in before a major crash is likely to have little or no TB attached to it but money after will do.

rdpeat

Thanks judygarland and dunstonh,
What you say about money paid in before a crash and terminal bonuses is interesting.
I've had another look at my payout letter and my policy document. It was actually a "Minimum Cost Endowment" described as having a sum assured of "10,520 with profits". The life cover for about 30k was on a first-death basis. I don't know if that is different to a low-cost endowment and whether the additional detail is important to calculating the terminal bonus. I phoned Clerical Medical at the beginning of this month (June) and the lady confirmed that the terminal bonus was zero but said TBs can be revised (up or down) any time before the actual day of payment.
The schedule of maturity benefits that comes with the payout letter shows the "Guaranteed Terminal Bonus" = zero and says Clerical Medical normally reviews its rates in Feb and Aug but can change them at short notice if investment conditions change. I'm not expecting any change.
On closer inspection the period was also 24 years not 25 'cos we were churned. That saves me 564 pounds (about 2.7%) + the interest on the loan next year. Maybe that will help to make up for the zero terminal bonus. ;-)

TREVORCOLMAN

I have a standard life policy which matures in Apr 12. They wrote to me recently to inform me that one of my options when it matures is to take out another policy or re-invest the money with them!

:rotfl::rotfl::rotfl::rotfl::rotfl::rotfl:

castle96

my L&G low cost endmt. Matures 2014
58% terminal bonus rate showing now (was 109% 3 yrs ago)

TREVORCOLMAN

castle96 wrote: »

my L&G low cost endmt. Matures 2014
58% terminal bonus rate showing now (was 109% 3 yrs ago)

I would be happy with 58% term bone rrrs.

Dick_here

Going back to the OP, is there a site that lists bonus rates anywhere ?

property.advert

dunstonh wrote: »

Clerical medical have several with profits funds. Each with different returns depending on the asset backed ratio.

Teminal bonuses are also dependent on timescale and how much money has gone in at various points. i.e. money paid in before a major crash is likely to have little or no TB attached to it but money after will do.

Why is that ? referencing the TB that is ?

If you invest prior to a crash then the fund would perform less well than one which invests just after a fall, simply because the starting points are different. Just what has that got to do with terminal bonuses ?