TSB Homebuyers Plan question

Adamfield

My in-laws had one of these that they took out in 1994 and stopped paying into in 2004 when they moved their mortgage elsewhere. My question is whether or not it's an insurance policy that ends when they stopped paying it or whether it's some sort of endowment as the original paperwork details a sum payable on maturity (presumably the end of the mortgage) as well as surrender values for years 1, 2, 3 etc. TSB Life policies are now managed by Scottish Widows and they flatly said nothing is owed but I remain unconvinced having looked at the paperwork.

edsax

Hi Adamfield my mothers case was very similar she took out a TSB Home Buyers Plan back in 1992 again for 10 years. Once the mortgage was paid for and The Plan release form was signed by herself and the then Lloyds/TSB agent no payment was ever made. Lloyd's like RBS see this as a Life Insurance policy ie a mortgage payment protection insurance scheme. Our argument lies in the fact that on the release form document it mentions the word 'The Assured' not 'The Insured' for  this reason alone you have the right believe that TSB's original agreement meant a payout in any eventuality and in any case when sold the policy that's what mum was lead to believe. Yes one part of the plan is a life insurance policy and that's how the bank will try to draw you away from the other clause in the plan which was that it was also an investment scheme which is backed up the annual surrender options you mentioned. We're currently chasing this Lloyds regarding this issue GOOD LUCK to us both x 

Old_Lifer

The term  'The Assured'  is  found on all types of life policy.     It  is found  on  value policies (those which have or acquire a surrender value )   and  on  non-value policies  which never have a surrender value such as term or decreasing term policies.

Others on the Forum may recognise the product    but whatever it is,  all  you need to do is  read the policy document.   The policy schedule will tell you when the sum assured is  payable.   

Most mortgages would have a term longer than 10 years.

Old_Lifer

Although as I do not know the product,  the following scenario, common in the early  1990's, may  perhaps provide an answer to both posts.

A whole life  policy could be taken out as a mortgage repayment vehicle and in order to  be  a 'qualifying policy' (and therefore tax-free) the policy would be set-up with a minimum  premium payment term of 10 years  although often it would be the term of the mortgage.    The premium would be invested usually in a managed fund  , with  charges  (life cover, any monthly charge, etc.) being deducted.     Often,  if premiums payments stopped   the full sum assured would remain in force with the charges continuing to be deducted from the investment pot each month.    Since no more premiums were being paid and the cost of the life cover would be rising  each year,   the investment pot would  shrink more and more until  eventually the  money ran-out and the policy terminated without value.        Put simply, if the policy was not surrendered when the  house was sold/mortgage repaid  ,  all the value in the policy  could have   slowly vanished over the years.

edsax

Hi there and thanks for your input quite useful as I've not found a lot of info on this particular plan please direct me to anymore help online if you know. In our case this was a premium managed fund and life cover with increasing annual surrender values for the first 5 years and an Assured sum from the given maturity date once the Mortgage was paid off. The life cover ended on the same date as the policy matured (a few months before the mortgage was paid). To my knowledge no further charges should have been deducted once the release form was signed. Lloyds TSB have never explained why they didn't pay up at the time and since have simply said they can't find the paperwork that far back and thus refused to recognise our complaint. When I recently took our paperwork into a branch the manager said it was simply a life insurance policy the documents strongly suggest otherwise from what we know and what you've explained. At any rate this response should have come up in previous attempts whilst dealing with this matter. I'm at my wits end because even if this was a life insurance policy I'm 100% sure my mother was lead to believe there would be a guaranteed payout on the Maturity date. Thanks again all the same.

Old_Lifer

As this was a managed fund  there wouldn't  have been a surrender value as such   but the policy would have been worth whatever was the value of the units at any point.     The  surrender values in the first 5 years are simply illustrations of what  the policyholder would have been likely to receive  assuming the units  were to increase  in value at a rate of   ' x percent '  each year.

The guaranteed  payout  at maturity may in fact have been a guaranteed payout on death.

I am not  too clear from your posts what documentation you actually have.    Is it possible the policy proceeds  were paid direct to the mortgage provider to clear the mortgage ?

The policy  would have terminated on the maturity date.    During my service  with a Life Office we were required to keep records of cancelled policies  for seven years.       Sadly,  if the policy records were destroyed  long ago and no longer exist,  I cannot see a complaint  nearly 20 years after the  maturity  getting anywhere.

tonyellis56

I have just found a TSB Homebuyers plan that we took out in 1998 and was due to mature in 2013. 

I also had a letter dated March 98 from our  solicitors stating that that policy and another one for 9K which were not needed for our mortgage were being returned to us.
I wonder if any of the contributors to the thread above had any success in claiming monies owed to them.I am minded to ask TSB about mine but would like to know if it is a none starter.

Thanks

dunstonh

I wonder if any of the contributors to the thread above had any success in claiming monies owed to them

What makes you think that there is a fund value?
Did you pay the premiums up to maturity or did you surrender it before maturity?

With endowments, you paid in each month until maturity. If you surrendered the policy early, they stop the monthly payments and pay out the money.   In some rarer cases, the ongoing cost of life assurance gets deducted from the fund value and the fund value remains invested (minus the cost of life assurance) until maturity. 
If the policy continued beyond you paying the regular premiums, you would continue to receive an annual statement up to maturity.   

.I am minded to ask TSB about mine but would like to know if it is a none starter.

TSB will know nothing about it.   Modern TSB is a different company to the old TSB.  Scottish Widows have all the old TSB life policies.

tonyellis56

Thanks dustonh,
I came across the policy document and a letter from my solicitors yesterday while unpacking boxes . There is also a letter from a case officer at Lloyd’s TSB from 2001 which gave mean opportunity to accept his offer. I don’t have any other correspondence on the matter but it seems I never got what they offered me back then so I am wondering now if it’s worth digging into it. The earlier threads all seemed pessimistic but none mentioned wether they had any success at all.

dunstonh

The earlier threads all seemed pessimistic but none mentioned wether they had any success at all.

Being a product that was either matured or surrendered, I'm the vast majority of cases, they would have paid out at the appropriate time and have been forgotten.

Insurers pay tracing companies to find those that have gone missing when money is due.  it can take some time after maturity but it sounds like yours was surrendered very early on.      It is worth noting that these types of policies often didn't build any value whatsoever in the early years.    So, there may have been nothing to pay on surrender.  Or the amount was so small, that you don't remember (i.e. a surrender value of a few hundred pounds).

Scottish Widows will know if the policy still exists or not but after all this time, they are unlikely to be able to give much information.   It may be as little as the date is was surrendered.