Endowment maturity value??

laurence4fun

Hi,
I have two low cost endowment policies that are due to reach maturity, one in November 2012, and the other in January 2013. One policy is with Aviva, and the other with Phoenix, though neither were originally taken out with those companies.
I do not have an issue with the miss-selling aspect on either policy.
I assume that in the next few weeks/months, I will be contacted by both companies with a maturity value, which I realistically expect to be substantially lower than I was expecting when the policies were taken out 25 years ago.
My query is on what grounds can I dispute the proposed sums?
Is there any datum that I can measure the performance of my policies against?
What is the appeal procedure if I am forced to go that far?
I am in the fortunate position where I have previously paid my mortgage off, and therefore do not need the policies to pay off the mortgage, but I am obviously keen to maximize my payout and not let the insurance companies get away with murder.
Any advice would be gratefully accepted.
Many thanks.

dunstonh

My query is on what grounds can I dispute the proposed sums?

you cant.

Is there any datum that I can measure the performance of my policies against?

if with profits then largely no, if unit linked then yes.

What is the appeal procedure if I am forced to go that far?

there isnt one.

I am in the fortunate position where I have previously paid my mortgage off, and therefore do not need the policies to pay off the mortgage, but I am obviously keen to maximize my payout and not let the insurance companies get away with murder.

It is not a game of haggle. You will get whatever the value is on the day of maturity. No more, no less.

opinions4u

You get what they're worth. End of story.

laurence4fun

Thanks for the replies.
It appears they can give me whatever they like then by way of a maturity value!
I do not have details as to how my endowment funds have been invested, so have no way of checking their value at maturity.
Good game!!

dunstonh

It appears they can give me whatever they like then by way of a maturity value!

No. They will give you what the investment is worth.

laurence4fun

How do I know that?
How do I know whether or not they have mismanaged my policy, and the anticipated shortfall is down to the insurance company's incompetence and not the state of the markets as they are claiming.
This is why I was wondering whether or not there is some sort of benchmark to measure the performance against?
I did a rough calculation a couple of years ago, and the policies had performed no better than had I put my monthly premiums in a savings account paying the Bank of England base interest rate.
Aren't they supposed to be experts at investment?

opinions4u

laurence4fun wrote: »

How do I know that?

Because the assets of the fund have a value and it reflects your share of that value.

This can be direct, in the case of a unit linked fund, or simply attributed from a with profits fund. Either way, it is what it is.

How do I know whether or not they have mismanaged my policy, and the anticipated shortfall is down to the insurance company's incompetence and not the state of the markets as they are claiming.

Some investment managers are better than others. Some are luckier. Some funds aren't managed actively at all. Many with profits funds have failed because the regulator told them to move from equities to "safer" investments. If this hadn't happened the likelihood is many more endowments would be succeeding in reaching their target because the equities they moved out of rose rather sharply after the event.

This is why I was wondering whether or not there is some sort of benchmark to measure the performance against?

You might well find some limited information on Google. But if you know you came 8th out of 10 then what? It changes nothing. You get what you get.

I did a rough calculation a couple of years ago, and the policies had performed no better than had I put my monthly premiums in a savings account paying the Bank of England base interest rate.
Aren't they supposed to be experts at investment?

They also provided life assurance.

Remember, when you took the policy out you had high interest rates, high inflation and high investment returns. All three have gone and the reasons are all inter-related.

As endowment returns have diminished, borrowers have enjoyed lower interest only payments too. If those payment reductions had been used to reduce debt (rather than being spent on other things) then the endowments would still be covering the full remaining mortgage debt.

Bottom line though: even if the policy has performed worse than others, there's no compensation, no negotiation, no refunds. You get what you get.

Sstripey

I'm in a similar position to the OP. It's annoying that the payouts are so low, but opinions4u is quite right in that for mortgage holders the investment has to be seen in the light of hugely reduced mortgage interest payments over the last decade, which in many cases have helped homeowners to pay off mortgages earlier than they planned to. We'd all like the big payouts that looked likely at the outset, but it ain't gonna happen.

brewerdave

I was in exactly the same position just over a year ago with mortgage paid off - a 20 year Phoenix policy (formerly Scottish Provident) paid out with a shortfall of 27% vs original target sum,whilst the Norwich pay out was 23% short of target (improved because of the NU guarantee).:(
Both policies were low cost endowments but I had made a successful misselling claim which had netted about £3.5k and I also got money back after the flotations of both NU and Scottish Provident,so overall I wasn't far short of target. I did ask for a full explanation of the pay out from Phoenix but basically what they supplied was useless for judging the performance;didn't even bother with NU - just bunged the money into ISAs!!

COLOURBOUNCE

Some investment managers are better than others. Some are luckier. Some funds aren't managed actively at all. Many with profits funds have failed because the regulator told them to move from equities to "safer" investments. If this hadn't happened the likelihood is many more endowments would be succeeding in reaching their target because the equities they moved out of rose rather sharply after the event.


Mmm, the so called regulator really have not covered themselves in glory in this fiasco. If any good comes from it, trust none of them and do your own thing, far safer and alot less frustating.

laurence4fun

Thanks all for your responses...........and sympathies!