Scottish Amicable Endowment - Payment Of Further Bonus

BallooTheBear

Please remember that the 2004 figure was an actual written quote to surrender the endowment ie what they would have paid if I signed the agreement, it should have included everything.

Thanks.

micken

@TonyMMM

Thanks for this information could you possibly give the size of the bonus as a percentage of the sum assured? I have a similar endowment and was wanting to a "back of envelope" estimate.

Thanks

Mick

TonyMMM

micken ..
It was "Flexidowment" savings plan ...paid in £10 per month since April 83
Sum Assured £2,600
Sum Assured + Annual Bonuses after 25years = approx £ 5,700
Paid out (including terminal bonus) in April 08 = £10,260

dunstonh

Thats a savings endomwent plan rather than a mortgage one so it has a lower sum assured than a mortgage plan. However, for mortgages the following info on scot am plans was as follows:

2004 - 89% of endowments hit target (of those falling short, the average shortfall was £890)
2005 - 95% of endowments hit target (of those falling short, the average shortfall was just £49. The average surplus was £2409)
2006 - 96% hit target (average shortfall for those falling short was £700 and average surplus £2600).
2007 - 98% hit target (average shortfall for those falling short was £518 and average surplus was £3348).
2008 estimate - 98.2% expected to hit target with average suprlus of £2280 and those falling short, average shortfall will be £362

micken

Many thanks for your reply TonyMMM. Pleased to see you did so well.

Thanks also dunstonh for your detailed information. You don't happen to have a source for similar information from Winterthur do you? I have an ex-CM low cost endowment with-profits plan that I know will underperform but I'm not sure about how the terminal bonus might pan out (if at all).

Thanks

Mick

dunstonh

You don't happen to have a source for similar information from Winterthur do you?

Sorry no. Winterthur are a company I have never placed business with (never seen them have a product I deem good enough) and none of my clients have one so I have never bothered to look it up for them. Pru are quite good with disclosure on maturities but I suppose they would be as they have one of the best with profits funds.

johncr

Re Scottish Amicable Terminal Bonuses.

After much searching on the web, I unearthed the following table of the current bonuses, including terminal bonuses. In my case, going to page 2 of the document, terminal bonuses for Scottish Amicable Insurance Fund, policy taken out in 1966, bonus is 230% (of the sum assured + existing accumulated bonuses). This ties in EXACTLY with the figures supplied to me by the Pru.

http://www.pruadviser.co.uk/content/acrobat/BDMS0027.PDF

Hope this is of some help - it certainly helped reassure me that I was getting the correct terminal bonus.

Old_coin-op

I stumbled across this interesting thread when trying to find out a little about my own Scot Am endowment policy. It’s a ‘bonus series & special features ‘P’ policy’ if that means anything to anyone. Basically, it was taken out in 1988 to cover a £15,900 mortgage. Now, I can see that the original posting on this thread has lead to comments on maturity values and shortfalls and this is the area which intrigued me. I pay £661 per year and by 1996 the policy, including sum assured and bonuses, was worth just over £21,000; so I was both surprised and pleased. However, since the late 1990’s the fall in bonus rates, meant that the policy as of mid-2007 was only worth around £26,500. Now, in itself, for a policy apparently aiming at £15,900, that seems still pretty good. However, taking into account the payments of £661 per year I am making, the policy has actually added quite a bit less in value since the late 90’s through bonuses than I have actually paid in.
So, I wondered what anyone makes of this bearing in mind such issues as ‘smoothing’ (am I now being smoothed back !) and the fact that my endowment seems so far ahead of its target amount when other policies seem to be just missing or just achieving target.

EdInvestor

Old_coin-op wrote: »

So, I wondered what anyone makes of this bearing in mind such issues as ‘smoothing’ (am I now being smoothed back !)

Could be.;) Have you considered surrendering?

and the fact that my endowment seems so far ahead of its target amount when other policies seem to be just missing or just achieving target.

A bit of "overbonusing" in the past perhaps. By no means uncommon - it was a heavily deployed marketing technique by the lifecos.

Old_coin-op

Quote ''Have you considered surrendering?''

Well, not until now, as I have always thought that the 'life cover' was worth something. However, I now have other life cover, so this isn't really a consideration.

However, a friend of mine has just surrendered a policy he had with a different company so it has made me wonder. Basically, I don't need access to the cash, so I can indulge in waiting if the overall pefromance together with the terminal bonus ( which from the chart cited by someone above should be 53%), is better than cashing in now. On the other hand, if cashing in now releases most of the potential policy value and it is certain that I can get a better reward elsewhere I would be foolish not to.

Any thoughts on the pro's and con's would be appreciated. 25 years seemed an unreal commitment 20 years ago when I was young:beer: ; there is almost a loyalty to see it through having gotten this far!