Underperforming Policy

irri_tant

bought an Endowment Assurance with Profits plus Level Term Assurance without Profits policy back in 1993 over a 15 year term @ £12.50 pm. Sum assured was £1418.

Just had closeure on this policy and it is paying out less than paid in. £2250 paid in, £2027 pay out which I’ve not accepted. Wrote to the company and they came back with an offer of paying back £2250 + £1345 as bonus’s etc after saying in their letter that it was not a suitable policy @ the time of sale.

Does that seem like a fair end of contract settlement or should I go to the ombudsman?

dunstonh

Does that seem like a fair end of contract settlement or should I go to the ombudsman?

Its not something you can haggle with generally. If they void the policy and return your premiums plus interest then that is following the rules laid down in these cases. The £1345 is not a bonus. It will be interest and taxed accordingly.

irri_tant

dunstonh wrote: »

Its not something you can haggle with generally. If they void the policy and return your premiums plus interest then that is following the rules laid down in these cases. The £1345 is not a bonus. It will be interest and taxed accordingly.

Have they voided the policy?

It ran it's 15 year term but the payout was going to be less than that paid in so we queried it. They are offering £1345 as a settlerment plus all we paid in.

dunstonh

What they are offering you is in place of the maturity value. Technically, that means they are voiding the policy and returning your premiums plus interest instead (which will be taxed). That is the normal way of doing these things.