Countrywide Endowment

jamesalfa

Hi

I have a countrywide endowment which is performing OK. I have had it since 2000. We no longer rely on it to pay off any interest only part of a mortgage.

I have always been under the impression that my premiums were used to buy units in a trust fund, and a monthly fee is taken to cover the cost of administering the 'policy'.

I have found some old documentation stating that the premium of £102.45 is actually made up of:

Death benefit £84.71
Critical illness £10.24
Mortgage Payment protection £6.55
Premium protection £0.95
£102.45


Can anyone explain this?

1 I never asked for any mortgage payment protection or realised I had any. Is this a form of PPI and can I therefore make a claim.

2 I phoned countrywide and asked to remove the critical illness. They said they cannot do this. My policy booklet states that 'If you remove critical illness benefit, the policy will end and a new policy will be issued in its place. The new policy will have the same policy number as the old one'. I told the lady on the phone this and she said 'we don't do new endowments now'

3 I phoned countrywide and asked them to remove the payment protection. They said they cannot do this.

4 I asked to remove the death benefit. They said they cannot do this but can reduce the value is pays out down to the target mortgage amount of the endowment.

Any thought/comments/experiences would be appreciated.

kingstreet

Making an alteration late in the life of a qualifying policy can remove its qualifying status. This would make the proceeds taxable on maturity and is to be avoided.

Death benefit is an integral part of an endowment policy. It is a life assurance policy with a savings element, after all. The separate death benefit slowly reduces as the savings element grows and takes over the payout on death.

For example, at the outset, the death benefit may be £100,000 with a savings value of £0. After ten years, the death benefit may be £70,000, with a savings value of £30,000. Later, the death benefit falls further as the savings element grows.

Critical illness cover pays the sum assured if you suffer one of the illnesses listed in the policy documentation upto the required level of severity (if any). This could pay off the whole mortgage amount before you die.

I don't know what the "mortgage payment protection" element is. You need to find out from the insurer what cover is provided and what are the terms and conditions.

Finally, premium payment protection simply means if you have an illness which prevents you working beyond a qualifying period, the cover continues, but your premiums cease. This applies to the shorter of the end of the term, or your return to work.

jamesalfa

Thanks for your swift reply kingstreet

kingstreet wrote: »

Making an alteration late in the life of a qualifying policy can remove its qualifying status. This would make the proceeds taxable on maturity and is to be avoided.

Death benefit is an integral part of an endowment policy. It is a life assurance policy with a savings element, after all. The separate death benefit slowly reduces as the savings element grows and takes over the payout on death.

For example, at the outset, the death benefit may be £100,000 with a savings value of £0. After ten years, the death benefit may be £70,000, with a savings value of £30,000. Later, the death benefit falls further as the savings element grows.

I have made a call and I have been able to reduce the amount that the death benefit covers to the 'minimum target amount' the endowment should pay. The net result is that more of my money (about £13 per month) is going toward the investment.

Critical illness cover pays the sum assured if you suffer one of the illnesses listed in the policy documentation upto the required level of severity (if any). This could pay off the whole mortgage amount before you die.

'I have been unable to remove this from the policy even though I do not require it, as the T & C's state they would have to start a new endowment with the same policy number, but they no longer provide new endowments'.

I don't know what the "mortgage payment protection" element is. You need to find out from the insurer what cover is provided and what are the terms and conditions are.

'Not sure why they won't let me remove this, the T & C's say it can be done at any time. I will write to them.

Finally, premium payment protection simply means if you have an illness which prevents you working beyond a qualifying period, the cover continues, but your premiums cease. This applies to the shorter of the end of the term, or your return to work.

'Not sure why they won't let me remove this, the T & C's say it can be done at any time. I will write to them.

vectistim

If you took this out in 2000 there should be some sort of Reasons Why letter that should explain all the bits you've got built into the policy there.

Froggitt

jamesalfa wrote: »

Hi

I have a countrywide endowment which is performing OK. I have had it since 2000. We no longer rely on it to pay off any interest only part of a mortgage.

I have always been under the impression that my premiums were used to buy units in a trust fund, and a monthly fee is taken to cover the cost of administering the 'policy'.

I have found some old documentation stating that the premium of £102.45 is actually made up of:

Death benefit £84.71
Critical illness £10.24
Mortgage Payment protection £6.55
Premium protection £0.95
£102.45

In what way is the endowment performing OK - eg target amount v. projected amount?

Are you sure its not just a life assurance policy, with illness protection added on?