life policy or endownment

jesmin45

we took out a mortgage in 1995 (which we no longer have) and at the same time we took out either a life policy or an endowment, can't remember which it was and we have no paperwork for it. we rang the company and they are sending us copy documents. the guy on the phone said although the policy was for around £20,000 as it stands now it will be worth £9.000. Thats all he could tell us, so to me this sounds more like an endowment. If it is an endowment would we be able to cash it in now? If its a life policy would we have to wait until the term is up (i can't remember how long it was taken for) as if we stopped it now i presume we would loose everything we have paid into it, cheers for any advice

dimbo61

Think a life assurance policy has no cash in value ?
I would wait for the paperwork and read it very carefully to see if you have a final bonus and if you want to wait another 3/8 years ( 20/25 years)

dunstonh

it could be an endowment. However, some providers had whole of life assurance plans and level term assurance plans which could accrue a value. All are usually able to be surrendered early if no longer required.

davenport151

And dont forget - If it is an endowment you may also need to arrange life cover if you do decide to cash in.

jesmin45

Thanks for replies, hopefully documents will come in a few days and I will post on here what the policy actually is. We have a mortgage on a new house and have sufficient life cover and critical illness, so in theory we dont need the other one. Having said that I found some old paperwork last night from 1994, 2 pages which looks like they have been printed off a computer with the heading General Accident Life Assurance, new mortgage payment comparison 25 year term, with our names on, it looks like an illustration.

one illustration says - illustration of cost, new low cost endowment plan 80 method, which we think we never went ahead with.
Then the other says level net repayment, mortgage protection policy for a sum assured of £34,000 premium £8.72, which is only a few pence difference to the amount we have been paying. The mortgage protection policy does not require a surrender value. We had no idea we took this out!! And why its still running when we no longer have that mortgage. this will certainly make us check all future dd and so's!!

jesmin45

the plot thickens now after finding more paperwork stuffed in the garage! I can remember now the first mortgage we took out was an endowment one for £34,500 and in 2004 we realised this would not pay the mortgage off so after speaking with a FA he proceeded on a no win no fee basis and 15% of any won fees to him that he would take this matter up for us. We received compensation of £5500 when the life cover company accepted we had incurred a financial loss in early 2005. But I still cannot understand why we carried on paying the mortgage protection!

dunstonh

But I still cannot understand why we carried on paying the mortgage protection!

It would have required you to cancel it. The insurer cannot unless you tell them.

jesmin45

well seems like it wasnt what we thought, its a mortgage protection (terminal illness benefit) it says....
initial sum assured/death benefit £21,984
current sum assured/current death benefit £9,169

took out in 2001
15 yr term
level

additional benefits, terminal illness, critical illness,
premium protection - pays the premium if unable to work due to accident ir illness after waiting period of 1 month

So my partner must of taken it out as its in his name only but neither of us can remember!!

So will it be life cover or payment protection?
Its obviously to cover a mortgage we no longer have!
Advice most welcome, thanks

dunstonh

So will it be life cover or payment protection?

Its a life assurance policy with critical illness and permanent health insurance bolted on. It doesnt sound like PPI.

The_J

Agree with dunstonh (decreasing life and critical illness cover) but it's not PHI the "premium protection" is waiver of premium (actually a form of PPI).

edit: What can you do? Cancel it and save the monthly premium or keep it and you'll get a figure of up to 9 grand (it's 9k now but drops to 0 as the term progresses) if he gets a critical illness or dies within the next 4 years.

jesmin45

thanks but as its a level as opposed to a decreasing policy should it not remain the same throughout the term?