Norwich Union endowments Special Bonus

knuckledragger

Sorry if this has been posted before.

Has anyone else had a letter drop through the post stating that NU are going to pay them a Special Bonus on their endowment policy?

December 2008 - 3.6%
December 2009 - 3.6%
December 2010 - 3.6%

I believe that the money is coming from the Inherited Estates.

What's in it for NU?
Is the timing to do with the negotiations with the Policyholders Advocate?

Not wishing to look a gift horse in the mouth, but it sounds suspiciously like something for nothing...

http://www.norwichunion.com/specialbonus/index.htm

mpet

Yep, I got one of these today. As you say - it sounds good - well anthing to add value to help pay the mortgage can't be bad - can it

dunstonh

Is the timing to do with the negotiations with the Policyholders Advocate?

No. That is still ongoing and unrelated. This is due to not requiring to hold as much back for solvency requirements and therefore can issue it.

pawpurrs

Its so confusing I would love to know if mine is likely to pay off my mortgage.

So we could still get another pay out then?

pawpurrs

Yes ok we will get another one.

knuckledragger

I wonder if it would have been fairer not to have dished out the surplus cash like this and instead have increased the scope of the NU "Promise" to ensure that policies pay out what they were meant to. Perhaps by decreasing the growth required to honour the promise and increase the amounts that would be paid out.

dunstonh

Most NU policies are either on track or not that far off (despite the majority showing a shortfall on projections. The special bonus over 3 years on top of the normal bonus may be enough to bring many of them back into a surplus position. The mortgage promise will capture many more.

gocat

Doing some digging around here and noticed this thread.

Got a NU endowment policy due to mature in 2015.

Had a letter last February saying around £23,000 shortfall.

Also had the letter about the bonuses.

Was thinking if there is £23,000 shortfall, then should qualify for mis selling of endowments?

But if I have read this thread properly, most NU policies should be ok by the time of maturity.

Very confusing. Why would NU say there is a shortfall and then offer bonuses?

dunstonh

Was thinking if there is £23,000 shortfall, then should qualify for mis selling of endowments?

Having a potential shortfall on maturity is not grounds for complaint. Its how the recommendation was made that is where you may or may not have grounds for complaint.

But if I have read this thread properly, most NU policies should be ok by the time of maturity.

No-one can say. However, NU have been understating their actual performance in the projections. Take a look at the last few years where the same projection rates have been used (dont use the years when different projection rates were used otherwise you are not comparing like for like). You should find that the amount of the shortfall on most of them has been reducing.

Why would NU say there is a shortfall and then offer bonuses?

Because the projection rates are lower than what the policy was set up to achieve. i..e policy set up with target growth rate of 7.5% as an average. However, projections now use 6%. In that case the policy will automatically be in shortfall before a premium is even paid. Also, endowments dont grow with straight line growth. They start slowly and come on more later typically. Mainly as the charges were front loaded. There is also the special bonus,mortgage promise value and some plans not included terminal bonus accrued to date in the projections.

Some providers you know as soon as you mention their name that its going to be a bad one. NU are one of those that needs closer scrutiny as they have good and bad ones.

payless

update on the cash reattribution offer

If voted in favour -
Cash payments of at least £400 and average of £1,000 for eligible policyholders next summer
http://www.aviva.com/index.asp?PageID=55&category=aviva&year=Latest&newsid=4249

gocat

payless wrote: »

update on the cash reattribution offer

If voted in favour -
Cash payments of at least £400 and average of £1,000 for eligible policyholders next summer
http://www.aviva.com/index.asp?PageID=55&category=aviva&year=Latest&newsid=4249

That's gonna make up for the £23,000 shortfall they have forecasted for mine :rolleyes: Still better than nothing .

Just been informed my application for compensation was rejected as was out of the time barr. Deadline was last December. Cant remember receiving those letters but they have sent me copies so must have received them Ah well, nothing ventured, nothing gained !