Endowment Redress Calculation

Annisele

Deal_Surfer wrote: »

I guess I’m fishing for the answer of….what would you do if you were in my shoes?

Ok, well - making absolutely clear that this isn't advice, it's just musings from some random person on the internet who doesn't know the first thing about you - I think I'd go one of two ways.

I might say that I didn't want the CIC from outset, wouldn't have taken it if properly advised, and didn't want it included in the calculation now. In that case, I think I'd tell the insurer that (partly as a courtesy and partly in the hope that they'd exclude the CIC from the calculation), and then refer to FOS. However, it's quite hard to say CIC wasn't needed (unlikely that you'd have had any cover through employment, and even if you did not everybody is a fan of relying on CIC/life cover from their employers), and I'm not sure whether FOS would give you a different answer to the one the insurance company has already come up with.

On the other hand, I might say that I did want the CIC at outset, and still needed the CIC now. In that case, I'd probably say that if I'd been properly advised from outset I'd have wanted the maximum cover available for my £10 a month premium (and if I'm right in my assumption that the £10 is a minimum premium, the CIC available would have been higher than the CIC cover you actually got). In that case, I think I'd tell the insurer that I accepted their offer of redress, subject to them offering me replacement CIC - for the higher amount - on the same terms as I would have got when I first took out the policy.

If I now had some kind of health problem that meant it was difficult to obtain CIC elsewhere, I'd definitely go for the second option.

Bear in mind that it is possible to surrender the endowment whilst arguing about what the compensation should be. I am absolutely not advising that you do that - even if I was authorised to give advice (which I'm not), I couldn't do so on these boards, and I don't know enough about you to even begin to advise you. That will obviously have consequences for your life cover and CIC, and you should speak to an IFA if you're unsure.

I do appreciate that all the above says is "maybe" - but I actually don't know what I'd do in your shoes!

Deal_Surfer

Thank you so much for the ‘what if’ and ‘maybe’ angle from someone who just happened to give their unbiased opinion to a strangers dilemma…I’m pretty sure at this point I will sleep better tonight.

As I’m not intending to cancel the endowment policy (which I understand some may think is foolish in it’s own way) I’m going to make the executive decision of writing back to the policy provider and making it clear that had I of been given suitable advice in the first place, I would not have taken out CIC with a repayment mortgage…In hindsight, I was under the impression that it was necessary whilst going down the endowment mortgage route and certainly wasn’t given any advice or information on the contrary.

Despite the request I will make to my policy provider (i.e run the calculations for a third time, but this time excluding CIC due to the fact that I would not have wanted it with a repayment mortgage from the outset) I’m going to prepare myself for them to object and stand by their current offer which does include CIC. When I get that response (which lets face it, I will) at that point the whole thing is going to the FOS …what ever they decide will be the final outcome as far as I’m concerned.

Thanks again to everyone who’s been good enough to give their views in this post and big thanks to Annisele in particular for being a very knowledgeable, yet unbiased, forum user.

Here’s to whatever the FOS decide…in 6 to 9-months from now J