Standard Life Endowment. Help Please!!

dunstonh

Although the endowment would have been priced based on a much younger age and if there is critical illness cover included, then it will be better than current CI offerings as it should have greater coverage.

JoeK_3

keith1966 wrote: »

just some further thoughts(sorry if someone else has covered as i just skim read the thread)

1) have you tried to get compensation for being mis sold this policy(standard life have to prove from proposal papers that you were fully aware of the risks?
2) Have you thought about asking them to put the status on the policy to 'paid up' Basically you stop paying the £85/month but leave the money invested with them, you will lose the life cover as well i think?

Depending on the policy conditions, you could either lose the life insurance benefit or fritter away the acrued lump sum having to pay for the life insurance, if you made the endowment policy "paid up."

JoeK

Dithering_Dad

Hi catsneel,

These guys'll tie you in knots and I bet you're now as clueless as you were when you did the OP as to what decision to make. I was the same when I asked this question a couple of months ago, but I decided that even if (by some miracle) the endowment recovered over the 14 years it had left to run, the difference between the endowment returns and the returns I'd get from cashing it in and doing an overpayment on my mortgage would only be a few quid. My piece of mind was worth more than than.

I was in exactly the same position as you with a Standard Life endowment that I started in 1995 when I was single. When I got marrried we had to get term life assurance for my missus to the same amount as provided by my endowment.

I kept getting mails from SL telling me that it was unlikely that my endowment would cover the mortgage and so I decided that I'd prefer not to have the worry of it all. I calculated that cashing in the endowment and paying this amount off the mortgage, plus paying the £66.10 monthly endowment premiums onto the mortgage instead meant that I would definately pay off the mortgage at the end of the term.

I also got cheaper life assurance by having a joint life policy with my wife to cover the whole mortgage rather than sticking with the endowment, her term insurance and another joint life assurance for the repayment part of our mortgage (we moved house and got a larger mortgage - I got a repayment mortgage to cover this, I had learnt my lesson!).

Even though I knew the mortgage would now definately be paid off by the end of the term, taking control like this has given me the incentive to pile money onto the interest only mortgage and pay it off even quicker. I paid the inital £10700 from the cashed in endowment and have paid a further £689 off the interest only loan over the last couple of months. If I keep this up, I will have the interest only loan paid off within three years, not the 14 that it has left to run.

I felt that Standard Life had no interest in the With Profits endowments anymore and my money would be better spent elsewhere. It's a personal choice, but I feel so much better to be in control of my mortgage repayment rather than sitting with my fingers crossed, throwing good money after bad in the hope that the endowment would recover.

I cut my losses and feel better for it. You have to ask yourself if you would feel better doing the same.

21castlehill

Hi,

Sorry to hear your predicament,14 months ago I was in a similar position to yourself, I'd been paying into a Standard Life Endowment & had kept seeing the value fall year on year (projected shortfall was £18K). Last year I worked out that over the 14 years I'd been paying in I was £1000 in profit so I bit the bullit & surrendered the policy. My fixed rate endowment morgage was just lapsed back to variable rate, so I converted it to an 11 year repatment morgage & used the endowment money to repay part of my mortgage.

Yes I lost life cover but for me £80K cover was only £10pm (i'm 36). So when I crunched all the numbers I'm £37 a month worse off that I was with the endowment but in 2017 I am guaranteed to have paid off my Mortgage & not be looking as to how to fund my probable £18k or more shortfall.

For the extra £5k I'll shell out over the life of my mortgage, the peace of mind I get from knowing it's definately paid off is well worth the £37pm cost. And in all probability will be the cheaper route, still with hindsight we'd all make the right move everytime.

My advice is go for peace of mind it's better than relying on hope the markets recover, but you need to sit down & take a serious look at how the numbers pan out & make your decision on how much are you willing to pay for peace of mind.

catsneel

Thanks for all the replys.
Certainly lot's to think about and consider. Some big decisions to make.
We would have to be very disiplined if cashing in and what to do with the lump sum.The obvoius one being putting the lump sum against the mortgage.
Thanks to 'Dithering dad' and '21castlehill' for sharing your experiences of endowment problems and for all those financial experts who are giving their time to read through and offer advice.
Please feel free to further comment.
Thanks.

Sarahsaver

I have got a carp endowment too. Got compensation but the @ss of a judge gave that to the ex who has disappeared
Very simple question I hope, sorry if this has been said b4, what will happen if i simply do not pay into it?
Reason being I do not need it now as new hubby owns 1 and a half other properties so that is our security and will easily pay off this mortgage

dunstonh

what will happen if i simply do not pay into it?

It can be made paid up but you need to tell them that. If you dont, they could start deducting the cost of life cover from the investment element.

It will also reduce the basic sum assured, impact on the amount of terminal bonus and remove your mortgage promise value.

Gorgeous_George

I simply get a surrender value each month. If it keeps going up by more than my mortgage rate of interest then I keep it. The life insurance is effectively free. The danger is if the surrender value falls but I hope I have seen the last of these (no falls since flotation - coincidence?).

As for replacing life insurance. If the cover was £50K and you surrender for £20K, you only need £30K of cover to match the cover that you had with SL.

Dithering Dad: Paying off your mortgage has to be a good thing but remember, each pound of your overpayments are worth more than the pounds that you will save (i.e., over pay £100 today and you may well save paying £200 in 14 years' time but the £100 today may well be worth clo0se to £200 in 2021). It's important to enjoy life as well as clearing your mortgage in time for retirement. For example, I wouldn't sacrifice my holidays just to overpay my mortgage. I don't want to be a rich pensioner at the expense of living like a pauper today.



GG

dunstonh

The danger is if the surrender value falls but I hope I have seen the last of these (no falls since flotation - coincidence?).

I posted years ago on the forum that SL were keeping bonuses lower prior to demutualisation as they had people by the short and curlies. People were holding on to get their shares with the intention of surrendering as soon as they could. Those that stayed on after would get benefit of an increased bonus made possible by both the recovery and holding back on the bonus rates in the recent past.

GG has got the right idea in my view.

catsneel

Dithering Dad
I really like your outlook on life and common sense.
Well done so far.