Transparency on Maturity Payment

Goldiegirl

People often think their payout is 'on the low side' without doing any calculations to back up this assertation.

When I had endowment policies I got a statement every year which gave the bonus figure earned for that year and it also confirmed the percentage rate of the bonus. Also, until the later years of the policy, it gave a projected final bonus percentage too.

Using this information. I was able to track the bonuses over the years, and when the policies matured, the payout was pretty much what I'd been expecting.

Insurance companies send out annual statements, so, over the years they have given you the information you needed to keep track of your policy.

TrickyDicky101

It sounds to me like the 55k you quote is the target amount rather than the basic sum assured.the sum assured is what the annual bonuses will be applied to. I think asking the life office is a good idea because they should be able to provide the breakdown of how they have arrived at your maturity value

bigadaj

Endowments are morally one of the worst forms of mis selling, though not legally. Though the legal argument against is a combination of lack of regulation many years ago and the fact that the length of a mortgage term means that claims are out of time well before the mortgage term ends. I'm aware people were warned about shortfalls and sensibly would have made other provision, however the policies were sold by commission led salesmen, who not only promised the mortgage to be paid off, but a nice lump as well.

The crux though is that generally risk averse people looking for a product to ensure their home was paid for were hoodwinked by commission hungry salesmen into entering a speculative and opaque market, when the vast majority would have been far better suited to repayment from day one. As to whether they could have afforded a repayment mortgage is a different question, but if they couldn't then they couldn't afford the house and this is something they should have been made to recognise.

Baz-n-Kaz

Thank you all for your comments so far...very informative.

You're right trickydicky101; I checked it out and there was a minimum guarantee of £27.5k after £9.9k bonuses. The bonus was earned up until Winterthur took over 10 years ago, after then, nothing. I wonder if that's a reflection on the markets or the company.

Goldiegirl, I looked at the projections from Winterthur and its interesting that in 2008 they projected the same end value as the actual final figure. In the interim, the estimates worsened, so they seem to closely follow the All Share Index.

I'm still a bit puzzled how they can give me a settlement figure before we have reached the maturity date in 3 weeks time.

As for Bigadaj's comments, there's a lot of truth in those wise words. Twenty five years ago I seem to recall being offered 2 or 3 choices and it seemed obvious to take the least cost option.

My letter's in the post tomorrow to request further backup just as a matter of course. Thanks again.

dunstonh

The bonus was earned up until Winterthur took over 10 years ago, after then, nothing. I wonder if that's a reflection on the markets or the company.

Stockmakets fell by around 43% over 2001-2002.

Goldiegirl, I looked at the projections from Winterthur and its interesting that in 2008 they projected the same end value as the actual final figure.

Projections are just examples using defined rates. Statistically, you are more likely to get a different figure. However, they have to show something. As you get closer to maturity, the figure will become more likely though.

In the interim, the estimates worsened, so they seem to closely follow the All Share Index.

No. The FSA periodically changes the projection figures.

I'm still a bit puzzled how they can give me a settlement figure before we have reached the maturity date in 3 weeks time.

Because conventional with profits plans only change the bonus twice a year typically. You also pay your premium in advance. So, they can work out exactly what they are going to pay you after you have paid the final figure.