High risk endowment shortfall

heatherw_01

My husband took out a mortgage with his ex wife in 1991. The mortgage was for £38,000 and we received a red letter saying the shortfall could be £12,500

We are both useless when it comes to understanding mortages and endowments but we need to know what to do now.

• What does surrendering or selling of the endowment policy involve, and is this an realistic option?
• If we switch to a repayment mortage, how much more roughly is this a month and how does this work?

What is the best idea for us to do?

Any advice would be great as we do not understand endowments or mortgages at all!

blondie7

If you feel you have in anyway been mis-sold the policy then you can write to those who sold you the policy and hopefully claim some compensation. Failing this there are ads on tv who will take your case but think there is a fee not sure what it is. (Personally I would just try writing to those who sold the policy first.)

EdInvestor

Hello Heather

If you could post the following , we could have a look:

Company it's with
Current surrender value and percentage of teminal bonus in this (if any)
Guaranteed sum assured
Declared bonuses so far
Monthly premium
Policy maturity date

You may have to ring them up to get the latest info.

blondie7

How long have you got left on the mortgage?

heatherw_01

I will try to find out those details.

We have 12 years left

heatherw_01

Company it's with
Zurich (was Allied Dunbar)

Current surrender value
I don't know this as yet

Guaranteed sum assured
Looking on documents it never says guaranteed sum assured, just sum assured which is £38,000

Declared bonuses so far
Sorry, what does this mean?

Monthly premium
£34.69

Policy maturity date
1 feb 2017


I just need to know what we should do; take out a repayment mortgage, sell or surrender the endowment?

One other question; his ex wife's name is still on the plan and he said he couldn't get it removed as he would have to pay. Is this true?

As to the claim he made for being missold, they said it was too late to claim.

dunstonh

Allied Crowbar sold unit linked plans so there would be no guaranteed sum assured and no bonuses. These plans tend to have a daily value based on the value of the units in the fund(s) invested. There can be a surrender penalty applied to these which reduces over time. This type of policy cannot be sold.

You cannot change the name on the policy but you can change the assignment. A request to Allied Dunbar saying what you want to do should result in a change of assignment form (or something with a similar name) being issued. You will need the ex wife to sign to confirm because as it stands this policy also belongs to her and she has to give up her claim to the value.

EdInvestor

Hi Heather

Did your husband make a financial settlement at the time of his divorce with his ex wife? If so the value of the endowment should have been included.

Ring up AD and ask for the surrender value to see if a penalty is being applied.

You can either remortgage to repayment and/or pay the surrender value and endowment premiums into the existing mortgage after surrender to reduce it more quickly so you pay less interest.Check for any overpayment penalties.

Oh and if you need to replace the life cover, do it before you surrender the emdowment policy.