Royal London Endowment Query

cloudy913

I have just received my annual bonus statement for my 25 yr Endowment policy which has approx. 2 years to run before maturing . The policy was set up to give a target payment of £40, 000 . The statement gave a total guaranteed value which is approx. £12,500 short of that which is of no real surprise .
My query though is that I also received another "green letter " correspondence from Royal London about the same policy telling me that the policy is on track to meet or exceed the target amount of £40,000 . I am confused as I cant see the policy making another £10k profit on top of my monthly payments when its barely made £8k in the past 23 yrs .
Am I missing something ?

TrickyDicky101

Presumably the terminal bonus will make up the difference between the two numbers - the basic sum assured and any reversionary (annual) bonuses awarded will make up the guaranteed portion and then a final terminal bonus (non-guaranteed and largely dependent on stock market position at the time the policy matures) is what is 'on track' to meet target.

This assumes you have a traditional With Profits endowment or a Unitised With Profit plan (but not a Unit Linked plan).

dcfc67

They add a terminal bonus which is a percentage of the sum assured. This could add 60-70% to you figure.

cloudy913

Many thanks for the replies . Neither of the letters mentioned a termination bonus so that would probably be the reason why . It is a with profits plan .

dcfc67

Give them a call, i believe that last year (2017) terminal bonus was 70%, previous 2 years was around 62% of sum assured.