Sun Alliance Endowment Policy

Legacy_user

We took one out in 1983 alongside our first mortgage and it is due to mature in 2008. Today I received a letter from Phoenix (A Resolution Company????) which apparently now owns Sun Alliance and I don't understand a word of it but I think it means we are going to lose money.

Does anyone have any experience of this company, and if so can you explain what it means to us financially?

dunstonh

Sun Alliance Life is no longer owned by Sun Alliance. Its part of the resolution Life company who buy up failing life & pension arms of insurance companies.

It sounds like you have been sent a projection of benefits. Projections tend to use very low rates on endowments. However, you have to be very careful with projections as they are not very reliable to use as a guide to what you will actually get back.

An endowment growing at 9% a year will could easily show a shortfall if the projection rate is 4%. But its not growing at 4% so its pointless. Equally, an endowment in a closed with profits fund with low capital reserves and paying zero bonus will have a worse shortfall than the 4% figure.

A review of your endowment policy and the projection would need to be done to see what has and hasnt been included in the projection figure. Also, you are getting tax relief on your contributions. Does the projection include the tax relief or not (i.e. is it based on net or gross premiums). Does it include the terminal bonus accrued to date? Is it projecting from a current value or a surrender value (yes, some providers cannot provide a current value so have to project from a surrender value which automatically wipes a chunk off the value and gives an inaccurate projection)?

jimjoeray

I also have an endowment policy that has been transferred to this company. It is due to mature in June 2014 and will pay me around £20,000 at the last estimate instead of the minimum of £34,700 I was told. ( I was time-barred from making a complaint)

The latest letter from this company is disconcerting to say the least. It states it has applied to the high court to transfer some annuity policies to Canada Life Limited. This will mean that a specific charge associated with with-profits policies will increase to 0.9% and a charge at maturity will need to increase from 5% to 9%.

I am not financially minded but this seems to be going from the sublime to the ridiculous. Now instead of a terminal bonus it would appear policy holders have to pay a maturity charge of 9%!

Surely this cannot be correct is anybody regulating what these companies can do? I would also appreciate advice on whether I should cash in this policy.

System

Yes Jim my letter says much the same but I couldn't fathom what they meant with the 0.9% and 9%. I can't understand how there can be a charge on maturity if that is what the letter means. As I said before the whole thing baffles me.

fishyweb

I received a letter about this 9% charge at maturity yesterday. The fact that the policy is only expected to achieve a fraction of the targetted amount is an injury, but this additional charge is adding insult to it, big time.

How can this company do this kind of thing to policy holders? Is it legal, and is it something the regulators are happy with?

This is making me seethe. Is there any sort of Sun Alliance policy holder action group who can collectively try to do something about this?

omotn

I have received one of these letters and followed it up with some
enquiries and complaints. If we ought to do something about it then
let me know. I might be angry enough to organise something.

My details are
Policy maturity Dec 2007
Projection letter received March this year predicting maturity value of £20300 assuming 3.75%
Projection calculated today £18400 assuming 3.75%

By my calculations since March I have incurred a charge/loss of £1900 - this represents 9.35% of the total maturity value.
However the guaranteed protion of the policy is over £16000 so the "charge" represents 55% of the terminal bonus.

I have therefore complained that:
1) the projection in March was not issued in good faith - these charges must have been predictable
2) the letter makes no mention of any of these specific percentages - it is therefore misleading
3) the letter could have contained the re-projection - it didn't - it
is therefore economical with the truth
4) the policy bonus rates have been adjusted downwards for years - who got these so wrong that a swingeing 55% is necessary now - this smacks of ineptitude and incompetence
5) why have terminal rates gone down at a time when markets generally are going up - even the building society can give a return better than 3.75%
6) why do I have to ring on an 0845 number which costs me more money then a proper landline number and makes a profit for Phoenix

I am very angry, made worse by a power cut in Crouch End which means I've had to type this twice.

fishbrid

I would love to do something. These are my details:

Policy maturity Dec 2005
Projection letter received February this year predicting maturity value of £17300 assuming 3.75%
Actual final sum quoted in response to my query this week £13025 - no terminal bonus, just an interim bonus of £28!

Loxy1

I would also be interested in combining to try and make some sort of complaint and highlight our unhappiness with the perceived unfairness of

a. being switched to a new company (I invested in Sun alliance!)
b. The new company appearing to use our investments as a cash cow and impose huge charges.

omotn

There is a web site at Phoenix Alliance complaints where you can register your interest.

https://www.palal.org.uk

Get in touch

jimjoeray

From bad to worse - I have a with profits policy with Phoenix. Every six months I contact them for a surrender value and an estimated maturity value. In the past six months I have continued making payments and the stock market has been performing well but Phoenix have REDUCED the surrender value from £9740 to £9234 and the estimated maturity value by another £1000!!

Can this company do as it pleases?

omotn

We should do something