Endowment Assurance policies

Isobell

Please bare with me on this, I hope I have chosen the correct place to post. In 1992 My then husband and I were recommended an "Endowment Assurance policy" as a form of savings for our daughter, who was then 15 years old. The sum assured was £5500. with profits. Looking at the policy now, by the time the policy matures, we will have paid in £5964.00, so it does not even assure what has been paid in, let alone anything extra. My question is, was this a suitable savings scheme for a 15 year old, if not, what recourse do we have against the company that sold it to us? Any help would be greatly appreciated. Thank you

[Deleted User]

Whose life was the sum assured based on? You/your husband or your daughters?

It's perhaps unusual if you set it up as life assurance for your daughter. But they can provide good value, and may be cheaper than having a separate life policy in addition to the endowment itself.

Clearly, there are many reasons to be pleased about just taking the savings out at the end, and not needing to use the sum assured element.

HappyHarry

First things first.

The sum assured is the minimum death benefit of the policy. It is not the same as the current value, or the surrender value, or the final maturity value, all of which could be higher or lower than the sum assured.

Do you have a current value or surrender value (not sum assured) from the policy provider?

When does the policy mature?

Who was the provider?

Was it suitable? That will depend on your circumstances and attitude to risk at the time you took out the policy. Just because a product hasn't performed as well as you would like, does not make it an unsuitable policy.

dunstonh

My then husband and I were recommended an "Endowment Assurance policy" as a form of savings for our daughter, who was then 15 years old.

That recommendation sounds right for 1992. They were the most common form of monthly savings plan back then.

he sum assured was £5500. with profits. Looking at the policy now, by the time the policy matures, we will have paid in £5964.00, so it does not even assure what has been paid in, let alone anything extra.

That is normal. The point of these plans is only to have a nominal amount of life assurance. Mainly in the early years. As the fund value builds, it will exceed the sum assured and its the higher of the sum assured or the value which is paid out.

My question is, was this a suitable savings scheme for a 15 year old, if not, what recourse do we have against the company that sold it to us?

Woefully obsolete by 2016 standards but perfectly normal for 1992. Most options available today would not have been available back then.

Nothing you have said suggests any wrongdoing.