Endowment & Insurance Question Please

elvina

Hi

The Sun Life have agreed that we were mis sold our policy which is due to complete in 5 years to cover a mortgage of £20,650. The policy was taken out in 1988.

They have offered:-

Redress - 2231.74

Surrender value - 10366.33

If we accept, we would pay off a lump of the mortgage. We are 99.9% sure that we should unless anyone has any other comments please.

The other question is that I was horrified to see that of the £36,312.81 that we have thrown away on this policy, £6,683.40 is for "endowment plan premiums". Is this the insurance part of it please? Also if it is we think that we have seen something about this not being correct. Is this right please and if we shouldnt have been charged this can we do anything about claiming it back please?

Any help/advice would be very much appreciated.

Many thanks

dunstonh

he other question is that I was horrified to see that of the £36,312.81 that we have thrown away on this policy, £6,683.40 is for "endowment plan premiums".

Why does that horrify you? They are not in it for love. Plus, you took the plan out in the days of high inflation and boom/bust economy. The pricing and charges reflect that period. Charges are lower today in part to the low inflation, steady growth economy that we have. Are you equally horrified at the fact you pay back 2.5-3x the amount you borrow on the mortgage?

if we shouldnt have been charged this can we do anything about claiming it back please?

Its valid and you cannot claim it back. The redress payment takes it into account.

elvina

Hi Dunstonh

Thanks for the reply.

Yes I probably should have realised all this but this was my first time of buying anything and I was only in my early 20s and new from leaving home so I was very financially innocent, its only recently that I have discovered, thanks for Martin Lewis, that I didnt need to have the insurance part!

I appreciate that they arent doing it for love but I didnt realise that I was being ripped off! Its only when you see all the figures like I have just done that you realise just how much they take.

Do you know of anywhere that I can check that what they are offering me is fair please?

Many thanks

Elvina

dunstonh

I appreciate that they arent doing it for love but I didnt realise that I was being ripped off!

You are not being ripped off. You bought in a a more expensive era and pricing was based on the economics of that time. Its expensive by todays standards but thats because we have a steady, low inflation economy and computers have reduced costs. However, I think you will find that the figure in question is the amount you have paid in total including the investment element and cost of life cover and not just the setting up fees.

Do you know of anywhere that I can check that what they are offering me is fair please?

The calculation is defined and as long as the figures input are correct then the output should be as well. You can pay to get someone else to do the calculation but its probably money wasted nowadays as the method is so widely used.