Endowment, Sum Assured

shamusdb

Hello

I know this type of question may already be out there but its a minefield trying to decipher the relevant information so i thought i would just ask my questions instead.

I have a Standard Life Endowment policy (35K ish) that i took out in 1992 when i bought my first house. I since paid off the house circa 2002 but carried on with my endowment as a separate investment. When i get my statement is warns me that there may be a shortfall and it may not cover the cost of paying the property off.

My questions are
- If the endowment is not linked to a property then is there still a case for claiming it as mis-sold?
- Is there a time limit to claim? (someone told me 3 years?)
- I have a certificate looking bit if paper that says "Sum Assured 35K". Does this mean they guarantee a minimum pay out of 35K or is the word "Assured" misleading?

Thanks for reading
Shaun

kingstreet

The timebar runs for three years from the point you were notified the plan was likely to have a shortfall.

The guaranteed basic sum assured is the minimum which will be paid assuming you pay all the premiums on time throughout the term of the policy.

It is this figure on which annual and terminal bonuses are calculated.

A policy can also have a sum assured in the sense of how much is paid on death, but this is a different figure, normally the mortgage amount originally covered at the outset.

shamusdb

kingstreet wrote: »

The timebar runs for three years from the point you were notified the plan was likely to have a shortfall.

The guaranteed basic sum assured is the minimum which will be paid assuming you pay all the premiums on time throughout the term of the policy.

It is this figure on which annual and terminal bonuses are calculated.

A policy can also have a sum assured in the sense of how much is paid on death, but this is a different figure, normally the mortgage amount originally covered at the outset.

Thanks for your quick response

I think the policy does have life insurance, so what your saying is that the sum assured may only be paid out on death, not when it matures?

Shaun

kingstreet

No. What I'm saying is you need to be able to differentiate between the guaranteed basic sum assured, which will normally be described using those words exactly and the amount paid on death, which may also use the words "sum assured" but won't include the words "guaranteed" and "basic."

If this is not clear from the letter/statement you are reading, ask the insurer to explain what each item means and how it impacts you.

opinions4u

If it's a with profits policy it will have 2 sums assured.

1) Basic sum assured, typically around 40% of the life cover amount - so £14k for the policy in question (or thereabouts).

2) Sum assured in case of death - for the policy in question £35k.

If you survive, you are guaranteed the £14k plus bonuses. The bonuses are intended to push it past the £35k mark but tend not to these days. Standard Life have a Mortgage Endowment Promise which may well get you very close.

If you die, you'll get £35k (unless the bonuses accrued have already gone past the £35k mark which is highly unlikely).

dunstonh

If the endowment is not linked to a property then is there still a case for claiming it as mis-sold?

If you are not timebarred then you can still complain. However, if your complaint is successful, then any redress is calculated to the point it was no longer used as a mortgage endowment.

- Is there a time limit to claim? (someone told me 3 years?)

You have 3 years from first being notified of a high risk of a shortfall. Most of those were issued around 2002-2006. By 2009, the majority of endowments were timebarred. All the Std Life ones on my agency are timebarred with 2007 being when most common year.

is the word "Assured" misleading?

The sum assured is £x because that is the life assurance amount. It is assured to be paid out in the event of death. The above posts cover it more.

shamusdb

Thanks you all very much for your replies. Its made things much clearer and is very much appreciated.

One last question........with 5 years to go is it generally worth leaving it to mature or is there any mileage in surrendering. Or is there no such thing as general situation?

Kind regards
Shaun

opinions4u

shamusdb wrote: »

Thanks you all very much for your replies. Its made things much clearer and is very much appreciated.

One last question........with 5 years to go is it generally worth leaving it to mature or is there any mileage in surrendering. Or is there no such thing as general situation?

Kind regards
Shaun

I'd suggest the Mortgage Endowment Promise probably makes it better for most policy holders to hang on in there. But individual circumstances can differ and nobody will be able to tell you what the future returns will be with any knowledge - merely estimates, guesses and projections.

Do you still have your Standard Life shares?

POPPYOSCAR

shamusdb wrote: »

Thanks you all very much for your replies. Its made things much clearer and is very much appreciated.

One last question........with 5 years to go is it generally worth leaving it to mature or is there any mileage in surrendering. Or is there no such thing as general situation?

Kind regards
Shaun

Although we had paid off our mortgage we kept ours going right until maturity last year.

It was worthwhile for us as we received quite a nice terminal bonus, more than we thought we would get in the poor financial climate we are in.Even so it was still £6000 short of the original anticipated maturity value.

shamusdb

Thanks all

I think i would have been greedy and sold my shares