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Mortgage Endowment News
Endowment red peril
Simon Lambert, This is Money
25 February 2006
LIFE insurance giants have urged policyholders not to ignore endowment
red letters in the wake of imminent deadlines on complaints.
Some of Britain's biggest insurers imposed time-bars on miss-selling
complaints and with cut-off dates swiftly approaching they have warned
customers that for some policyholders it will soon be too late to ask
Millions of endowment policyholders in Britain received red letters
warning them their policy may not achieve its expected target - not all
were miss-sold but those that were could be running out of time.
The Financial Ombudsman Service, which rules on disputed endowment
complaints, expects cases to peak in the coming year, but many
homeowners who believe they were miss-sold a policy have so far failed
Insurers have been required to notify policyholders of time limits
imposed, since June 2004. The firms must send out a warning letter six
months before the deadline hits.
Not all companies introduced time bars - with Prudential and Legal &
General opting not to impose limits - but many others have set final
Britain's biggest insurer Norwich Union gave some customers until June
this year, some policyholders at Scottish Widows have until the end of
this month and some at Standard Life's have until May this year.
Insurers say they are doing their best to notify the red letter
customers. Rob Pell, of Norwich Union, said: 'Everybody has had double
the amount of notice required and we are writing to people three months
before anything applies with a fairly blunt letter saying 'this is
coming up please act now.''
However, AXA’s annual bonus declaration,
which affects the remaining 97% of its with profits policies, and
includes regular and terminal bonus rates, takes place in March 2005
Regular bonus rates on former AXA Equity & Law business for the year
2004 are 1% (and they were 2% in 2003).
Asked to commenting on the announcement, Peter Shelley, their Chief
Actuary, said: "We have once again added bonuses to our conventional
with profits life and pensions policies".
"Long term returns on maturing policies remain good. Customers with
25-year conventional life policies maturing now have seen an average
return of 8% p.a. while those with 25-year pensions policies have seen
an average return of over 11% p.a."
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"information only" and should not be taken as "advice".
If you are unsure about what to do, if anything,
about your endowment policy, you should consider taking advice from an
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