Standard Life Endowment Problem

Compensationitis

Good grief

This is the last piece of paper someone receives before it matures, if you are new to the industry this would not be apparent.

This is what that particular mortgage endowment is going to pay out, the basic sum assured would have been far lower than the mortgage target amount, yes?, the we add the reversionary bonus the annual bonus and them the terminal bonus, kapisch?

What is missing here?

Well then, how about realistic reprojection of future benefits? No such thing exists.

I worry about the people who surrendered these policies and lost a fortune....

dunstonh

You really ought to tone your messages differently as they come over as arrogant, condescending or insulting.

EdInvestor

Hello Compensationitis

Perhaps you could post the figures for the Guaranteed sum assured and attaching/reversionary bonuses.

What you've showed so far doesn't tell us anything much really.

wazz_2

Sorry folks for butting in...

But I've got a SL endowment dilemma I could do with a little sage advice with..

I have just been offered circa £4k compensation for mis-selling of a £55k policy in 1989 (30 yr term)

SL are offering to buy back the policy at it's current surrender value (£10k) and are saying that the surrender value + compensation if payed off the original £55k will put me in the same position I would have been if I'd taken out a repayment back in 1989..

I should also mention thay have offered financial help with the convertion of my mortgage from endowment to repayment with my existing lender..

Questions are

1) Should I sell the policy back now before de-mu next year???

2) Is it likely SL will buy back the policy after de-mu???

3) Are my options limited for selling to another company depening on the type of policy???

4) Does anyone know what the de-mu windfall is likely to be??? Is it going to be worth hanging on for £500-£1k?? or is it likely to be more???

Sorry for the long post & butting in

Any advice / ideas / thoughts would br great..

Thanks

Wazz

EdInvestor

Hi Wazz

Is the compensation contingent on surrendering the endowment?It shouldn't be.If it were me, I would probably take the compo now, wait for the DM windfall and then consider surrendering after that. You can overpay the current mortgage with the compo money and then later remortgage to repayment including the endowment money as well (mortgage interest rates look like coming down later on.)

You can surrender the policy any time.The DM should not affect the surrender value, as the company is now saying it is looking at ways of transferring people out of With profits post DM in an orderly fashion.You may or may not be able to sell the policy (Google for "TEP traders" to find firms and get a quote).

How much will they offer towards the costs of a conversion to a repayment mortgage?
That seems to be all you could lose. Reasonable chance for a 1.5-2.5k total windfall,IMHO, but this depends on many factors so DYOR

Post the following info for a more detailed view:

Guaranteed sum assured
Total bonuses
Surrender value
Monthly premium
Maturity date

wazz_2

Thanks Editor,

Looks like it would be worth taking the Comp making a lump sump reduction now and waiting for the DM windfall next year before deciding to cash in the policy & converting to a full repayment.... the little extra from the windfall would help...

Post the following info for a more detailed view:

Guaranteed sum assured - Currently £13,750

Total bonuses - £7,912

Surrender value £10,614

Monthly premium £45

Maturity date Nov 2019

Figures above are from the last statement Feb 05... They also make referance to the endowment promise of between £5k - £8k???

Thank again

Wazz

EdInvestor

I'd hold on Wazz, if you've got a topup from the mortgage promise in there.

If you took it now and invested the S/V plus premiums @ a conservative net 3.5% for the period to maturity you'd get almost 27k, compared with a guaranteed value which is now 21.7k.But with an extra "promise" element of 5-8k, you will be in much the same position if you stay.

So might as well stay at least till next year and pocket the windfall as well.

wazz_2

Thanks again Editor,

I'm tied in with my existing lender until the end of 2006 anyway so it makes sence to put any big decisions on hold until then...

I'm going to take the comp as is and wait (with fingers crossed)

Cheers

Wazz