Transparency on Maturity Payment

Baz-n-Kaz

Hi,
We have just completed paying £20,613 in endowment premiums over 25 years and have now received notification from Friends Life that the maturity payment will be £33,800.

This seems a bit on the low side but I would be interested in hearing what others have experienced.

We were originally told the policy would pay off the £55,000 mortgage. After going through the usual claims for mis-selling the ombudsman said we would have been no better off with a repayment mortgage. Calculations were too complex to understand fully so despite querying I had to assume this was correct.

The policy has switched hands several times over the years and its always disconcerting when these organisation move your money around without prior consultation or valuation.

I'm amazed that Friends Life have given the final 'worth' of the policy on a letter without any backup as to how this was calculated; especially after paying in all that money over 25 years. With the lack of transparency how do I know there's not a error? Should I take this in good faith or am I entitled to receive a full breakdown of how this is calculated?

dunstonh

After going through the usual claims for mis-selling the ombudsman said we would have been no better off with a repayment mortgage.

That means at the point you complained, the repayment mortgage option would have been more costly against what you have paid and what the endowment is worth. Not an uncommon scenario.

The policy has switched hands several times over the years and its always disconcerting when these organisation move your money around without prior consultation or valuation.

The policy has never changed hands and your money hasnt moved your money around without consultation.

I'm amazed that Friends Life have given the final 'worth' of the policy on a letter without any backup as to how this was calculated

They publish annual accounts.

With the lack of transparency how do I know there's not a error?

There is transparency. You just need to read the published accounts.

Thrugelmir

Baz-n-Kaz wrote: »

I'm amazed that Friends Life have given the final 'worth' of the policy on a letter without any backup as to how this was calculated; especially after paying in all that money over 25 years. With the lack of transparency how do I know there's not a error? Should I take this in good faith or am I entitled to receive a full breakdown of how this is calculated?

Haven't you received annual statements with declared bonuses?

Baz-n-Kaz

Thanks for your quick response dunstonh. The latest annual accounts are for 2011 and are too high level for my query. I will be querying this with the company and was interested in others' practical experience.

Baz-n-Kaz

Hi Thrugelmir. Our annual statements are just a snapshot in time and are out of date by the time they are received. The worth of a policy can go up and down and so I would need to see a statement that supports the final value without guessing.

It's interesting, you can buy any item in a supermarket and it is packed with information so that you know what you are buying. Yet Friends Life expected you to blindly accept a maturity figure worth 1,000's of times more, without any supporting information.

Thrugelmir

Baz-n-Kaz wrote: »

Hi Thrugelmir. Our annual statements are just a snapshot in time and are out of date by the time they are received. The worth of a policy can go up and down and so I would need to see a statement that supports the final value without guessing.

It's interesting, you can buy any item in a supermarket and it is packed with information so that you know what you are buying. Yet Friends Life expected you to blindly accept a maturity figure worth 1,000's of times more, without any supporting information.

Is your policy unit linked ?

rs65

Baz-n-Kaz wrote: »

It's interesting, you can buy any item in a supermarket and it is packed with information so that you know what you are buying. Yet Friends Life expected you to blindly accept a maturity figure worth 1,000's of times more, without any supporting information.

Don't know the answer to your question but that made me laugh. People have been reading beef but blindly buying horse in several supermarkets.

Thrugelmir

rs65 wrote: »

Don't know the answer to your question but that made me laugh. People have been reading beef but blindly buying horse in several supermarkets.

People bought shares in banks in the belief that they were making huge profits.

TrickyDicky101

What information was actually provided on this letter?

What was your basic sum assured?

Can you confirm you have a conventional With Profits policy and not a Unit Linked policy (note that Unitised With Profits is much closer to Traditional With Profits than Unit Linked).

Did you have any breakdown in the letter at all? Eg basic sum assured, reversionary bonuses, terminal bonus?

Did you have any breaks from paying the regular premium over the life of the policy?

Who was the endowment actually taken out with? This could be Friends Provident, UK Provident, Colonial, Winterthur, Sun Life Assurance, Axa and possibly others.

dunstonh

It's interesting, you can buy any item in a supermarket and it is packed with information so that you know what you are buying. Yet Friends Life expected you to blindly accept a maturity figure worth 1,000's of times more, without any supporting information.

They publish all the information needed. Indeed, the data given is far more in depth and accurate than ingredients on a tin. Assuming you are not getting horse meat!

The problem is that you don't appear to understand the data. Perhaps in the same way you wouldnt create the item of food if you had to make it from the published ingredients (or you could be a chef!)

Baz-n-Kaz

Hi TrickyDicly101. If I remember rightly the fund was 50/50 indexed and with profits. 4 companies including Colonial and Winterthur. Sum assured was the original mortgage value at £55k.

No breakdown with the letter. Just the one figure and request for id, which is why I made this posting. Just curious if this is normal practice.