Aviva Low Cost Endowment

littleboo

Hi,

Can someone help me understand these figures for our 25 year Low Cost Endowment from Aviva (previously Norwich Union), which is 4 ½ years from maturity, please ?

Specifically, I’m trying to understand, and on the safe assumption that it wont pay out anything close to £45,000;
If we keep paying in till maturity, do we get full additional £6900 from the promise, or are there conditions outside of our control that affect that amount?
What is the minimum we can expect – is it £22,552.29 or £22,552.29 + £6900 (the promise amount) ?
The fact that the surrender values are > than the guaranteed minimum value is presumably good, but can these values go down as well as up?
As it gets close to maturity, is the surrender value + the promise amount and indicator of what it might pay out, or is that over simplifying?

Many thanks

Guaranteed minimum value on death: £45,000.00
Total regular bonus (£)5,722.29
Sum Assured (£) 16,830.00
Guaranteed minimum value at maturity (£) 22,552.29
Surrender Value as at 5 January 2017 (£) 23,040.13
Surrender Value as at 5 January 2018 25,125.06

From the most recent review letter;
Following the re-attribution process which completed in 2009, we’ve been able to remove one of the fund related conditions applying to the mortgage endowment promise. This is good news and means any actual shortfall will reduce by up to £6,900.00 (maximum promise amount), assuming you continue to meet all the conditions set out in ’Answers to some questions you may have’.

dunstonh

What is the minimum we can expect – is it £22,552.29 or £22,552.29 + £6900 (the promise amount) ?

£22,552.29 plus the MEP value (which is upto £6900 but could vary. Although the MEPs are typically paying the full amount currently and have been for a long time).

There is possibly a surrender penalty on yours at present and you haven't mentioned the final bonus accrued to date. So, we can only work out the net position of a final bonus minus the surrender penalty of £2,572.77.

Its current position is around £32,025

littleboo

Many thanks for that , I cant see anything other than Regular Bonuses show below mentioned on the letters that we receive, no mention of Final Bonus accrued

The premiums until maturity Jan 2023 will be about £3.5K so presumably makes sense to keep paying in until then

dcfc67

Have you asked them what the terminal bonus is. Ask for last 5 years its a % of you sum assured.

When I asked my provider (CIS)it was between 60-70% which puts another 12K on my sum

No MEP with CIS, now Royal London.

dunstonh

The Aviva endowment will be a unitised with-profits plan and not a conventional with profits plan. So, historic final bonus figures are not of any benefit as it accrues or is adjusted daily. Unlike conventional WP plans where the final bonus would be the same for the whole year even if you got just 1 day in that year.

The surrender value will include the final bonus accrued to date. Although that will also include any surrender penalty and market value reduction if any. neither of those last two applies on maturity.