Standard Life Endowment. Help Please!!

JoeK_3

I have repeatedly posted on here that no one other than an Independent Financial Adviser (IFA) is qualified to give advice on an endowment policy and yet once again an unqualified individual has suggested that if a a client surrendered their policy on an assumed 6% interest being paid ...... How do you know that interest rates are going to be at 6% or higher???

OP please do yourself a favour and get advice from a qualified IFA.

JoeK

EdInvestor

JoeK wrote: »

I have repeatedly posted on here that no one other than an Independent Financial Adviser (IFA) is qualified to give advice on an endowment policy

Well you would say that, wouldn't you

and yet once again an unqualified individual has suggested that if a a client surrendered their policy on an assumed 6% interest being paid on an unknown mortgage term

The big return will be on the immediate reduction of the loan at the current interest rate by the surrender value lump.

Edinvestor, for goodness sake, you don't even know who the Insurance company is

Try reading the thread title Joe, it often helps.

JoeK_3

Edinvestor, please clarify:

1) According to the Financial Services Authority (FSA) who is authorised to give advice on endowment policies.

2) Please could you predict interest rates from now to 2019

3) Please predict SL's investment returns from now until 2019

4) Please show me where you have made allowances in your calculations for the cost of replacement life insurance.

You have absolutely no idea of the OP's age or state of health and neither did you ask.

Come on, let's be sensible!

JoeK

dunstonh

Plus note that standard life projections are notoriously unreliable. Mortgage promise values and terminal bonuses are not included in projections and with some SL endowments, they project from the surrender value and not a current value.

EdInvestor

dunstonh wrote: »

Mortgage promise values and terminal bonuses are not included in projections and with some SL endowments, they project from the surrender value and not a current value.

I would just suggest that possibly Standard Life is trying to tell you something when it does that......

Readers should note that no official advice is given on this forum - it's for your information only, please do your own research. .

dunstonh

I would just suggest that possibly Standard Life is trying to tell you something when it does that......

Most providers dont include terminal bonus in the projection and those that have a mortgage promise dont either. The projection from surrender value is because the systems in use when these policies were taken out were never designed to give projections and that was the only way to do it.

This is why we have seen lower rate projections from SL come out lower in value than the guaranteed minimum maturity value.

catsneel

whoops, do we need a referee here????
So,Dunstonh, do you think the policy is worth hanging on to?
My husband and i are both 53 by the way, in answer to someones question above.
We already have another insurance policy for pay out of £45,000 on first death.paying £29 a month.
Thanks for all advice given, we really do appreciate it and for the time taken .
Thanks.
P.S
Please feel free to ask any further questions needed.

JoeK_3

catsneel wrote: »

whoops, do we need a referee here????

None, needed as this is a perennial problem

catsneel wrote: »

My husband and i are both 53 by the way, in answer to someones question above.

You do not state yours and your husband's current health.

catsneel wrote: »

We already have another insurance policy for pay out of £45,000 on first death.paying £29 a month.

There you go, a shortfall of 19,000 already.

Without getting too technical, this is a classic case of the need to see an Independent Financial Adviser (IFA). Financial planning is not just telling someone to en-cash policies but to take full consideration of the consequences of that advice.

We do not at this stage know who the major wage earner is and the consequences of loosing that person, both whilst the mortgage is in force or after this period.

catsneel wrote: »

Thanks for all advice given, we really do appreciate it and for the time taken .
Thanks.
P.S
Please feel free to ask any further questions needed.

Sorry to come in on your thread even if you refer to me as someone but believe me I am trying in my professional capacity to be helpful.

JoeK

catsneel

Joek,
Sorry to have offended you by refering to you as 'someone', it wasn't intentional at all. I really do appreciate your professional advice here.
In answer to further questions asked. We are both in good health, non smokers or drinkers and have 3 dependant children.
My husband is the main wage earner, i work part-time.
Hopes this further helps, thanks.

EdInvestor

The main thing you have to decide on these days is whether you still want to take a risk with paying off your mortgage, when the chances are that you could be worse off if you do.

Most people were sold endowments on the basis they would pay off the mortgage and produce an additional lump sum.Now, many (possibly most) of them will not even pay off the moprtgage, much less produce anything extra.

Unfortunately many SL endowments fall into this category.This is because SL lost a massive chunk of the money reserved for terminal bonuses in the market crash (no less than 8billion quid of the policyholders' money was lost by the incomptetent management) . :mad:

This money is lost forever - it can never be regained.Management has stated that terminal bonuses are still on a declining trend.There is very little point in holding onto this policy when you can get a guaranteed higher return by using the money to pay off your mortgage (which was, after all, the whole point we should remember.......:rolleyes: ) .