Mortgage Endowment shortfall - What should i do?

Sirlaughalot

TrickyDicky101 wrote: »

I'm not aware of any. There are a lot of closed funds about - and there may well be many more in the future as the Life Insurance industry has moved towards Unitised Funds where the value of the policy is directly correlated to the value of the underlying investments (so there is no 'smoothing' of annual bonuses in operation).

Personally (and this is only my opinion) I would not invest in a policy that relied on smoothing of returns. I prefer to diversify my risk myself rather than let some actuary do it for me.

Thanks TD101,
Unfortunately we had little choice in the matter as it was the only mortgage we could get at the time and like you i too like to diversify and spread risk.

I do think that, if as you say, these closed to new business funds appear unattractive, it should be a legal requirement to notify the policy holders so that they can consider the options (surrender) available to them. While i`m forever the optimist when it comes to equities i would only be looking to surrender the policy with about 4-5 years to maturity.

The closed issue and what i now know does become a bit of a game changer. Just for peace of mind i will look at how the zombie fund has performed since closure in relation to the other fund in the policy!



Thanks

SL