Endowment mortgage shortfall

Gricer

We have two endowment policies one of which finishes in about 2 years and the other in 4 years. We have just received letters regarding these policies, one a red warning and one amber warning telling us that between them they are likely to fall several thousand pounds short of the mortgage amount. Both are described as "with profits" policies which we were told at the time meant that they would pay of the mortgage and give us a nice extra sum on top. The possibility that they might never cover the mortgage amount was never mentioned. I feel I have a good case for complaint but here lies the problem. Everything I've read on the subject seems to suggest that I need to complain to the company that sold us the policies. Trouble is they went out of business years ago. What can I do? Would it be worthwhile making a complaint directly to the insurance company? (In our case Legal and General).
I'm sorry if similar queries have been answered on here before but I had no success searching for similar cases.

Annisele

How long ago is "years ago"?

If it was before August 1988, then unfortunately there is nobody you can complain to. If it was after August 1988, the FSCS might be able to help.

There's no point complaining to L&G if you know that somebody else sold the policy; L&G will just say "we didn't give you advice". Are you certain that the selling agent wasn't an appointed rep of L&G?

Did you receive red letters before? If you did, you might now be out of time.

Gricer

Thanks Annisele.

The first endowment did indeed start before 1988. The amount was £40000 and the predicted shortfall is £1800.

The second one which we took out as a top up when we moved two years later has a start date of 1st August 1988. In some ways this second one is worse as although it is only for £11000 the predicted shortfall is nearly £3000.

I don't know if the chap that sold us the policy was an L&G appointed rep or not and I don't know how I could find out. I do know that a local estate agent (no longer around) arranged for him to meet us at their premises. As I remember he was there a couple of afternoons a week. I don't know when they (or he) actually went out of business.

The most recent letters are the first we've had that showed "red warning" shortfalls.

Seems scandalous that after paying them for 25 years they cannot be held responsible in any way for us ending up £5000 short of what we'll need to pay off the mortgage, especially as the letters still laughingly refer to the policies as 'with profits' policies.

Annisele

Unfortunately both of those are too early to be covered by the FSCS - it doesn't cover "business conducted before 28 August 1988".

If you ask L&G, they will tell you whether they were responsible for the sale or not. But, if it was a local estate agent - almost certainly they weren't.

I doubt it makes you feel any better, but L&G aren't "laughingly" referring to the policies as 'with profits' - that's just the name of that type of policy.