Endowment with profits & critical illness calculation upon death claim 1Yleft of full 25Y term

JohnPick

No Idea.
however the first payment has been processed and released apparently (to be received yet) and that is a little more that the basic guaranteed death sum and  a separate sum for interest being released soon, do not get why it wouldn't be altogether in a single payout.

MWT

JohnPick said:

No Idea.
however the first payment has been processed and released apparently (to be received yet) and that is a little more that the basic guaranteed death sum and  a separate sum for interest being released soon, do not get why it wouldn't be altogether in a single payout.

They cannot calculate the interest due until the payment has been made as that stops the clock on the interest accruing ...

JohnPick

Have to say the whole process is confusing and there is no comprehensive guide for you to follow that I could find.
Why would there be any interest above and beyond the policy value when terminated?

MWT

The death claim is payable as at the date of death and that should mean the policy was also terminated at that same date.

This should result in the payment of at least the minimum amount guaranteed on death along with any portion of the monthly payments covering the period after the date of death either collected before or after the date of death, along with an interest payment covering the amount payable upon death from the date of death to the date the payment is send.

That seems to match what you are getting doesn't it?

JohnPick

Truth be told the interest hasn't been worked out and not yet been disclosed although supposed to be happening today and hadn't been given a value for it (only going on whats been said no idea what is or isn't true). However if we make some assumptions the payout disclosed would appear to be the minimum death, plus the interest on that money for the period of time between filing the claim and payout, I reckon that those calculations fall extremely close.
That then wouldn't make sense for an extra payment for interest separately?
I am back to too many unknows to validate the payment as being correct, as I don't know for certain that the policy value came to that figure after applying bonuses and then he delay inpayment from date claim made to payout requires a seperate interest payment.
I do know it says minimum death payout of X
I know that the payout is slightly more than that
I know it states that they will pay the greater of the policy value or the minimum death benefit.
I know there was roughly a 25% deficit between minimum payout on death (saving target) and the surrender value.
 If they say how things were calculated then it will make more sense i suspect but still wont know if its right.

MWT

I suspect it will be a lot clearer once you have received the payments and any accompanying explanations.

If it is still unclear at that point then perhaps post here again with actual monetary amounts and others may be able to help you understand the calculations, but in general terms, if there was a 25% deficit between the minimum payout upon death and the surrender value then you should be expecting the minimum payout upon death, together with a small additional amount covering excess amounts paid for the period after the date of death (if any) and the interest as previously mentioned.

Nothing you've posted so far suggests there is going to be much room for doubt over the amounts to be paid given the 25% deficit you mentioned...

dunstonh

3. Why are you not able to find out the calculation methods on policy documentation for such events as critical illness and death, should it be on there?

The payout should be the sum assured for death or the value of the investments, whichever is higher.   No interest is added unless there is a delay on the payment of the policy.
Its that simple. The policy document will state that.

4.Why is none of this ever explained how things work wrt to the investment part and the insurance elements?

You have to ask someone to explain it to you if you dont understand it yourself.  Have you ever asked someone?

5. why is the advice online so dam confusing?

Advice isn't given online.   

6. Why does no one explain tax liabilities at the time the policy was taken out for claims made?

They do.  It appears in both the key features document and the reasons why letter.

(it appears that some policies could be subjected to capital gains and or income tax, depending on how the policy has been used over the years

Life funds are not subject to capital gains tax. There can be some income tax issues on non-qualifying plans but they are rare.

it be great if there was some comprehensive simple advice to follow from the likes of this forum/ Martin's Show.

Martin is not authorised to give advice in regulated areas.

7. Why were we asked about cause of death, its in the death certificate?

Not everyone provides the death certificate immediately. Or in some cases not at all as some providers use the electronic register.   

8. How would you know when taking out a policy what deaths/ illnesses are covered and which ones are not?

All deaths are covered (bar suicide in the first 12 months).  The providers provide a list of critical illnesses and definitions upon request and are available pre-sale.   Although data supply today is far easier than it was 20+ years ago.

For reference, terminal bonus accrues as you go along.  It does not suddenly appear at the end.

Old_Lifer

When you receive payment you should also receive a letter  explaining  how the amount payable has been calculated.   Why not wait until you receive this,  at which point all may become clear

JohnPick

I will have to wait.........
I get the regulation side of things has to be covered appropriately, says it enough on the telly. Hence why he got experts in yesterday.
The problem I have with so many things that are regulated being miss sold (lack of confidence in the financial industry), its hard to know what is right and what the organisations are trying to get away with. There is no way to know until later exposed.
The access to the policy was online and at several points during the process the policy disappeared and then reappeared and disappeared with no indications or correspondence to explain why, so explanation of how it works is highly unlikely, especially given the run around at the beginning even though we used the contact details on the documentation provided.
On behalf of my partner who claimed due to their ex partner passing that was on the policy, I can say it caused  great deal of unnecessary stress, due to the messing around, to be fair i would expect some issues with people working from home, but not to the degree my partner went through.
As the money isn't required to pay the mortgage, I suspect we will be looking at reinvesting half of the money, which starts me on the next quest as to what the best way forward is.

JohnPick

MWT said:

I suspect it will be a lot clearer once you have received the payments and any accompanying explanations.

If it is still unclear at that point then perhaps post here again with actual monetary amounts and others may be able to help you understand the calculations, but in general terms, if there was a 25% deficit between the minimum payout upon death and the surrender value then you should be expecting the minimum payout upon death, together with a small additional amount covering excess amounts paid for the period after the date of death (if any) and the interest as previously mentioned.

Nothing you've posted so far suggests there is going to be much room for doubt over the amounts to be paid given the 25% deficit you mentioned...

agreed that looks like what has happened making some assumptions of interest rates its highly likely its min death payment plus interest in delay paying as indeed it fits too well.
That is why I am confused that an extra interest payment is to be made, its unlikely the representative on the phone knows much more than the details they can access which tells them certain pieces of information, it was clear that the the representative was reading off a screen for amount that had been authorised and the interest payment which had not yet been calculated.

I can add up reasonably well. I hate not understanding things, or not being able to go in and verify things as being above board.
Lack of trust unfortunately, driven by years of mis selling claims probably.