Endowment policy comes to fruition

Interest-Ed

One of our endowment policies has recently ended and we received the letter from our insurance company telling us they'd written to the bank informing them and were waiting for their instructions. All went quiet for a month - we rang the insurance company who confirmed they'd heard nothing from the bank so were, therefore, happy to send the cheque directly to us.

We put the money into a savings account and arranged a meeting with the Bank mortgage advisor to discuss this (amongst other things).

The mortgage advisor said the Banks aren't very interested in the endowment policies now! (I interpret this as 'won't be rushing to notify the customer they can reduce their mortgage).

We organised our own payment but lost about three months in the transaction.

This is probably more of a warning to others to not sit back on their laurels and presume someone will be acting on your behalf. CHECK and CHASE!

dunstonh

The mortgage advisor said the Banks aren't very interested in the endowment policies now! (I interpret this as 'won't be rushing to notify the customer they can reduce their mortgage).

Are you sure that is what he meant. Or was it that the banks dont tend to have an interest in the endowment policies any more. Having an interest on an endowment was the term that used to be used when you assigned the policy to the bank or the bank was noted as having an interest. It used to be a requirement but hasnt been for some time.

Interest-Ed

Hmm .. well, you could be right but, if this was the case, then they should notify their customers surely. Any response would have been better than nothing. This part of the mortgage has always been covered by the endowment policy which was taken out in the early 80s.

At least we'll be forwarned when the next one expires!

Thanks

EdInvestor

Interest-Ed wrote: »

Hmm .. well, you could be right but, if this was the case, then they should notify their customers surely.

Why?The insurance company notified you that the endowment had matured.Most endowments are not assigned any longer - indeed yours wasn't.It's not a requirement any more to use the endowment to pay off the mortgage either.Indeed it's not even a requirement to have one.You can just take out an interest-only mortgage - the bank doesn't care how you pay it back in 25 years, it's up to you.

It would be interesting to know how many people still have the same endowment/SVR mortgage they started out with 25 years ago.Can't be many, in that people move on average every 5 years, not to mention remortgage to a cheaper deal or to release equity.

effin

My endownment policy with Scottish Life matured on the 22nd Sept. They say they are unable to pay out without a letter from Alliance & Leceister as they have an interest in the policy. They have written to A & L twice and received no reply. I have not had a mortgage with A & L since 1996 and the policy is not charged to my current mortgage provider. Can Scottish Life legally withold payment? I have been in touch with A & L and they agreed to send the letter but how do I get my pay out if they do not do this?

dunstonh

Can Scottish Life legally withold payment?

Yes.

I have been in touch with A & L and they agreed to send the letter but how do I get my pay out if they do not do this?

If they dont do it, you dont get your money.

When the policy is was set up, A&L were assigned as having a financial interest in the policy which means the proceeds should be paid to them upon maturity. When you ceased the mortgage in 1996 with them, the assignment should have been removed. There is no blame there to attach as nobody took responsibility. It was a bit of an assumption that you would tell the endowment provider by sending them a copy of the mortgage closed letter. You probably werent told and they had no reason to tell you and the endowment provider wouldnt know any different.

Usually, interest is added to the maturity value until it is paid so its not sitting there doing nothing and it will be "out of market" so you wont suffer/gain from any movements in the markets.