Endowment Complaint upheld but...... help

sarahe

Hello all
Well I'm not sure if I should be pleased or not - FP have stated that ' the majority of the points raised in my complaint have been upheld.'

But FP want me to surrender my policy to them.
My policy is worth, according to them, £11,261 and my loss if I had paid a repayment mortgage is £1890.22. So they are offering £13,151.22

I wasn't thinking of surrendering the policy - as I can pay off a lump sum when it comes to it. Mortgage finishes - Aug 2018

I have 2 months in which to reply - should I get Independent advice?

Should I see what I could get from another company to sell the policy to them - seems a bit daft.

Could I just ask them for the £1890 and pay off some of my mortgage and let the policy carry on? I like this idea - the policy projections are far short of paying off the mortgage - like I was told and have a lump sum - but it's only costing me £55.50 a month.

Any comments read with interest. Many thanks to everyone. I wouldn't have even tried if it hadn't been for this site and I would have always wondered. So at least I can say I was correct in thinking that my policy was missold.
Thanks

silvercar

you complain that the policy was missold to you. They find in your favour so the compensation is designed to put you back in the situation you were in had you not taken the policy. This can mean not having the policy.

You could ask them for the £1890, but they would be within their rights to say no. After all if you wanted the policy, why complain?

Take the compensation and change to a repayment mortgage. Make sure you have life insurance to replace what was covered by the policy. If your health has deterioated and life insurance would now be expensive, you could ask for compensation to cover this.

EdInvestor

Post some info about the policy to see if you would be better off surrendering it:

Guaranteed sum assured
Declared bonuses
Maturity forecasts

Interest rate on mortgage

Mr_helpful

If it was mis sold and this has been upheld then you shouldnt have had it in the first place therefore whats the problem with them cashing it in. You cant have your cake and eat it.
Theres not much point in giving all the details of your endowment as this site does not give advice (according toi Edinvestor) so one couldnt advise you anyway.

EdInvestor

There's a difference between information and advice of course.What you get here on MSE is information, which should help you to make your own decisions about financial issues

With endowments, it's always helpful to see a comparison between the forecast performance from the provider and the return you would get if you surrendered the policy and used the money to pay off the mortgage.

At the moment, this comparison is likely to favour surrendering, as many people are paying interest on their loan at 6%-7% or even more, whereas even the best endowments are only expected to return around 6%. And for that, you have to take a risk and wait until maturity, whereas if you cash in and pay off the loan, you get an instant return.

But there might still be a few endowments around that are worth keeping, so it's best to post the figures to be sure.

If you need to replace the life cover, it's also a good thing to check the cost, prices have come down in recent years so it shouldn't be a bother.

You may also be able to get more if you sell your endowment.
Try this website to get a quote:

https://www.apmm.org

dunstonh

With endowments, it's always helpful to see a comparison between the forecast performance from the provider and the return you would get if you surrendered the policy and used the money to pay off the mortgage.

I agree. Although you should factor in the cost of replacement life cover (and CI and waiver is applic) and deduct the monthly cost of that from the investment projection so you are comparing like for like.

At the moment, this comparison is likely to favour surrendering,

Yes, because you arent comparing like for like.

whereas even the best endowments are only expected to return around 6%.

So, what about all the unit linked endowments with funds performing in double figures?

If you need to replace the life cover, it's also a good thing to check the cost, prices have come down in recent years so it shouldn't be a bother.

Its a good idea to check cost and get it accepted otherwise you could be in for a shock if you have had any medical issues.

JoeK_3

sarahe wrote: »

Hello all
Well I'm not sure if I should be pleased or not - FP have stated that ' the majority of the points raised in my complaint have been upheld.'

But FP want me to surrender my policy to them.
My policy is worth, according to them, £11,261 and my loss if I had paid a repayment mortgage is £1890.22. So they are offering £13,151.22

I wasn't thinking of surrendering the policy - as I can pay off a lump sum when it comes to it. Mortgage finishes - Aug 2018

I have 2 months in which to reply - should I get Independent advice?

Should I see what I could get from another company to sell the policy to them - seems a bit daft.

Could I just ask them for the £1890 and pay off some of my mortgage and let the policy carry on? I like this idea - the policy projections are far short of paying off the mortgage - like I was told and have a lump sum - but it's only costing me £55.50 a month.

Any comments read with interest. Many thanks to everyone. I wouldn't have even tried if it hadn't been for this site and I would have always wondered. So at least I can say I was correct in thinking that my policy was missold.
Thanks

You have already stated clearly that you were not thinking of surrendering the policy and yet one or two individuals are already guiding you to try and sell.

Take care here!!!

If you just want the compensation offered then write to FP and accept the figures and don't be swayed into selling.

JoeK

absolutebounder

Edinvestor
Sorry to butt in here but what happens if the information is wrong? The poster gets mis led. Now if they are mis led by a professional they can have a recourse. Suposing you get it wrong and someone takes your information and makes a loss. Do you care?
I seem to remember the authorities always said you should take professional financial advice before cashing in any endowment.
Just my 2 pence worth

JoeK_3

absolutebounder wrote: »

Edinvestor
Sorry to butt in here but what happens if the information is wrong? The poster gets mis led. Now if they are mis led by a professional they can have a recourse. Suposing you get it wrong and someone takes your information and makes a loss. Do you care?
I seem to remember the authorities always said you should take professional financial advice before cashing in any endowment.
Just my 2 pence worth

Absolutely bang on!! :T

See my post above.

JoeK

dunstonh

Back to the OP, if the endowment complaint was about a pre-sale endowment (sold before the mortgage existed) then voiding the policy is a normal method and there is nothing you can do about it. However, FP do like to void the policies on all upheld complaints because they take the view that if you are complaining that the policy was unsuitable for you and the complaint is upheld, then you shouldnt have the policy if they are paying to put you right. I admit it is a view I have agree with. However, the FSA have also said that the consumer can choose to keep or surrender where the complaint was about endowment vs repayment (and not pre-sale).

DOTW should be along in a day or two and will have more experience on how to respond to FP to get them to do what you want.

EdInvestor

absolutebounder wrote: »

Edinvestor
Sorry to butt in here but what happens if the information is wrong? The poster gets misled.

That's right - but information from anyone here (the site has NO IDEA who anyone posting here actually is, because it doesn't check) needs to be dealt with on the basis that you then go on the Do Your Own Research.

Now if they are mis led by a professional they can have a recourse.

If they are missold they can claim redress ( and they may or may not succeed in getting it).But to get advice on something which doesn't involve any selling ( such as whether or not to surrender an endowment) you often have to pay a (high) fee, if you can get a straight answer at all.

So many people prefer to come to BBs and see what they can find out for themselves.

Suposing you get it wrong and someone takes your information and makes a loss. Do you care?

Of course: that's why I try not to be vague, but ask inquirers to post the actual figures in detail.

I seem to remember the authorities always said you should take professional financial advice before cashing in any endowment.
Just my 2 pence worth

They do, but see above, it's not as simple as it seems.There is also the matter of trust: many people just don't trust what they are told by financial advisors these days, as they have been burnt too often in the past.