Aviva endowment projection spiralling - worth keeping?

coolexpipiens

Hello All

We have an Aviva £65,000 25 year "Guaranteed Min Cost End" Endowment policy that matures in December 2016. The premium is £85 pm.

A while ago we got the warning notices about the policy not paying the £65K and - remortgaged 5 1/2 years ago to take account of the projected shortfall. In fact we remortgaged so that we (hoped) we would be able to deal with the situation if the actual amount paid was as low as £40,000.

Last year's projection was that the policy may pay out £35,000-£38,100.
This year's statement (November 2012) projects the policy may pay out £32,000-£35,700.

So, in a year, the (projected) investment has fallen approx £3,000 - in another 4 years the final payout could fall another £12,000 and therefore be £41,000 short.
I guess on top of that "loss", I could add the £85 pm we currently pay - so lose another £4,080.

Pretty grim stuff

Maybe on a more positive note, the shortfall letters we get do mention that a "Mortgage Endowment Promise" may reduce the shortfall by £15,100.

What is the likelihood that this type of policy will keep losing £3,000 a year?
Is there any point in hoping that we might get some of the Mortgage Endowment Promise money?

Any comments greatly appreciated.

Mos

dunstonh

What is the likelihood that this type of policy will keep losing £3,000 a year?

Is it losing £3000 a year? Or is it only the revised assumptions?

Is there any point in hoping that we might get some of the Mortgage Endowment Promise money?

Its fully funded and all maturities to date that qualify have received it.

coolexpipiens

Thanks for your reply Dunstonh.

its the revised projections. Are you saying I'm assuming something from the projections?
Maybe I should ask the question a little different - could this sort of policy loose "everything'?