Do You Have An Endowment Policy?

By David Carter

Do you have an endowment policy that you hope will eventually pay off your mortgage? If you do there is a very good chance that it might not be sufficient to repay your mortgage at the end of its natural term. If you have been reading the financial press you may already know this.

And if you have recently received a Red Letter from your endowment mortgage lender then you will already certainly know! So what do you do now? You must act promptly to ensure you can meet the potential shortfall when your endowment matures.

That's the really bad news, but the good news is that it is not too late to do something major about it, but you need to act quickly.

You may be unhappy with the way your policy was sold to you in the first place, and you would be in good company if you were, as hundreds of thousands of people have been and are taking steps against their endowment company. If this applies to you too, you do have a right to make a complaint, providing that you do something about it and complain within three years of receiving your first Red Letter. If you don't complain within that time, then your complaint may be rejected out of hand, no matter how justified your case may be, hence the urgency.

So who should you complain to? In Great Britain you need to complain to the company or person (perhaps a financial advisor) who sold you the policy in the first place and this may well be different from the company that actually issued the endowment policy. Explain your situation and tell them that you wish to make a formal complaint. They should then give you an official complaints procedure that you should follow.

In Britain you can also discuss the matter with the Citizen's Advice Bureau and you can visit their website at www.citizensadvice.org.uk or you can try the Financial Services Authority, their web site is www.fas.gov.uk/consumer.

Unlike the Citizen's Advice Bureau the FSA cannot give you one-to-one personal advice, but as the official regulator of all financial services companies within the United Kingdom, they will provide you with detailed fact sheets explaining how to tackle the problem, and a great deal of other information too.

If you reside outside the United Kingdom and suspect you have the same problem, the first thing you must do is to check if the endowment policy you have will be sufficient to cover your mortgage when it matures. If you find that it isn't, then make sure that you do something about it now before it is too late, and thus ensure that you don't have a serious problem somewhere further down the line.

David Carter’s latest published work is SPLAM! Successful Property Letting And Management. Splam! Contains over 240 pages of hints and tips on how to start your own property business on a limited budget, and how to successfully let residential property. You can view actual extracts of the book at http://www.splam.co.uk and order a download or hard copy at this site. He also runs a holiday cottage website where you can access over 7,000 cottages, apartments and villas worldwide at http://www.pebblebeachmedia.co.uk You can contact David on any matter at supalife@aol.com

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Endowment Policy Misselling - How Much Compensation Could I Receive

By Keith Lunt

Many homeowners took out endowment policies expecting them to pay off their mortgages but have recently been alarmed to discover that this will not be the case. Your endowment could be thousands of pounds off target with no way of you finding this extra cash.

What Can I do?

This is where endowment compensation - or endowment redress - is used. But how much compensation could you receive?

The insurance companies aren't paying compensation according to how much of a shortfall you are predicted. If your claim is upheld, the endowment company is likely to make you an offer for compensation and an offer to cash in the policy. Look at this carefully and speak to an independent advisor to find out what is best for you.

What Else Does An Endowment Policy Cover?

One important point to remember is that part of your endowment payments have included a payment for life insurance. If you cash in your endowment, then you will need to arrange a new policy to replace the endowment.

Also, looking back over the period when you have been paying for the endowment, some of the payments have been used to pay a life insurance.

How Will The Insurance Calculate Compensation?

So how much compensation could you receive? The insurance company will look at the monthly payments you have made into your endowment policy. From this they will make an allowance to account for the life insurance aspect.

Then they will also look at how much interest you have been paying each month to keep the mortgage level. From these complicated figures, they will work out if you had instead been sold a repayment mortgage, how much would you have paid off. Then they compare this to how much your endowment is worth now if it was cashed in.

In short, if by paying the monthly payments you could have paid off more of your mortgage than your endowment has earned, then the difference is the compensation you are entitled to.

Was My Offer Correct?

So how do you know whether your offer of compensation is correct? That's where a specialist solicitor helps you. Not only will they deal with the paperwork and any appeals for you, they will also check you are given the maximum compensation. After all, they are being paid a percentage of the compensation (not including the cash in value) so the more compensation you receive, the more they receive.

Where Now?

To find out whether you can claim, or to speak to a solicitor without any obligation, leave your contact details or take the 60 second test. It only takes a minute to find out the answer or you can just leave your contact details and someone will call you back.

Keith Lunt runs several financial sites including http://www.endowment-claim.org.uk You are welcome to reprint this article as long as all links are included and work.

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High Time to Sell Your With-Profit Endowment Policies

By Gina K Smith

New analysis from independent financial magazine “Money Management” shows that payouts to with-profit endowment policyholders are continuing to fall. The list includes some of the biggest insurance companies in UK.

This is not a sudden fall. It began back in the 1980s and today, most of the companies that earlier offered those endowment policies are simply closed to new business.

The situation had been comparatively better until a few years ago but at present, these developments have the financial advisors around the UK worried about the future of with-profit endowment policies in coming years. Some of them are going to the extent of declaring it a high time to sell your endowment policies or switch to another method of investment.

However, the overall performance of equities in recent years in the UK is yet to hit a state of alert. They are performing pretty well but the equity holders must keep their eyes wide open to keep abreast of the latest changes in the market and should be more flexible in their investment portfolio.

A few months back, earlier this year, the with-profit endowment market was showing some good signs as some of the big insurers were offering higher bonuses. Plans that are maturing this year were supposed to yield bigger payouts than what had been initially expected. However, the predicted good signs for plans maturing in this financial year were only for 20% policyholders.

Market analysts think that this depression is due to lower than expected returns on investments and unconditioned market inflations in recent years.

When this is the general market trend for last couple of years, individual investors should become more careful in their investment moves and should consult some good investment advisors beforehand. However, it has been commonplace among policyholders to sell their policies long before the maturity date and in recent years the inclination for this has only grown. Advisors say that this is a proven and profitable investment plan if you can predict the right time to sell those policies.

Newer arrivals to this business often ask a simple question “Why should someone buy my policies when I am selling them fearing a market slash”! To add to this, they are often amazed to find out how much more they get than the surrender value. The answer is very simple, bigger investors buy these as a part of their investment portfolio.

Think twice if you want to run the risk of holding your with-profit endowment policies in coming years!

Gina is a freelance writer and consultant. For more information on selling endowment policies or endowment policy surrender, she recommends you to visit http://www.bestpriceendowment.com/

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Repayment Remortgages is The Cure For Outdated Endowment Policy

By Amanda Thompson

If bulls and the bears of the stock market have no effect on your mortgage plan then you must apply for endowment to repayment remortgage. An endowment mortgage is a financial product offered mainly in the UK. Endowment mortgage comprise of an interest only loan secured on your mortgage and an investment in the stock market. As against an ordinary repayment mortgage, the customer pays only the interest on the capital. The balance goes into the endowment fund. This stock oriented mortgage policy was workable in the context of stock boom of the 1980s and 1990s. At the end of the mortgage term, it seemed plausible that the investment would pay off the capital. But present day market status is unreliable and fails to make endowment mortgage a much sorted out plan. In recent years it is appropriate to revolutionize your endowment mortgage to repayment remortgage.

Remortgage is highly misunderstood for over the time we grow too comfortable in our mortgage policy. Holders of endowment mortgage are urged take up repayment remortgage so as to forestall the risk of being in huge debts once your mortgage matures. This you might shun as a possibility. But it is a very functional possibility. Why remortgage? If that is your query! Then you need to read more about your endowment mortgage. Repayment remortgage is very essential because endowment remortgage suffers from two major problems – shortfall and mis-selling.

Most consumers did not realize that their endowment mortgage could not reach its desired target. The risk of shortfall in endowment mortgage is a very strong vote in favour of repayment mortgage. Endowment policy is not an appropriate mortgage for everyone. So, if you have been sold an endowment mortgage without making you aware of the risk involved then perhaps you have been mis-sold their endowment policy. Any of these condition calls for fast action in favour of repayment remortgage.

The trends in the stock market are unanticipated. You never know when the wind changes the direction and you might not be able to repay your mortgage. This could mean capitulation of your endowment policy. Before this effects your credit status get a repayment remortgage. Mortgage is secured loan keeps your property as a compensation of the loan. Under no circumstances you can risk the possession of your property by giving consent to an incompatible mortgage deal. Remortgage to a repayment mortgage is definitely a much more dependable option. The monthly payment of repayment remortgage pays both the loan amount and the interest. As long as you don’t falter with making your repayments at remortgage, you will be able to forfeit your remortgage completely by the end of the loan term.

The remuneration with repayment remortgage is bounteous. The wavering of the stock market will no longer amount to your cause of concern. You will continue to enjoy all the benefits of your policy with a repayment remortgage. Endowment mortgage frequently fails to accumulate any funds and prove to be expensive than a repayment remortgage. The major disadvantage with endowment mortgage is that if you stop paying for your premium in the early years, the cash in value of endowment policy is very low. Selling the policy would mean loosing all the money that you have paid in form of premium. This makes endowment mortgage a very inflexible mortgage. By selecting a repayment remortgage over endowment mortgage you will have enough money and would not have to rely on other sources. By opting for repayment remortgage your claim for endowment compensation will not be exacted.

For all the twenty to twenty five years of your mortgage, you can’t keep on checking the stock market news in a hope that it may illustrate an affirmative after effect. You have exhausted enough money like that. Your money deserves a convalescent capitalization. You ought to have a repayment remortgage. Security, that your mortgage will be paid off, is the primary achievement of repayment remortgage which is not offered by endowment mortgage. Living in constant fear is not a recompense that will avoid you from trading your endowment policy for repayment remortgage. Indubitably, your monthly outgoings with repayment remortgage will the higher but there will be contentment which is our constant endeavour in every enterprise.

Amanda Thompson holds a Bachelor’s degree in Commerce from CPIT and has completed her master’s in Business Administration from IGNOU. She is as cautious about her finances as any person reading this is. She works for the personal loan web site http://www.chanceforloans.co.uk To find a Secured or unsecured loan that best suits your needs visit http://www.chanceforloans.co.uk

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Endowment Policy: Another Forgotten Option

By Michael Challiner

These complicated financial products combine life insurance and investment growth in one package. They were most commonly used as a way of repaying a mortgage and were most popular with homebuyers in the eighties and nineties.

The reason so many people bought them was because home loan firms and middlemen such as estate agents earned large commissions for selling. The charges tend to be 'front-loaded' meaning most of it is paid up front and therefore, for several years you will receive little if anything back if you have to stop paying the premiums.

In theory, these policies can grow to more than you need to repay your mortgage, giving you a bonus to spend on anything you like. In practice, this has rarely happened in recent years and of the 8.5 million endowments in 2004, 6.8 million were not expected to clear the mortgage they were originally intended to pay off.

With an endowment mortgage, you do not repay any of the capital you borrow during the term of the loan. Alternatively, the endowment policy should grow to produce a lump sum which is large enough to repay the loan in full at the end of the pre-agreed period of, normally, 25 years.

The monthly payments consist of interest on your mortgage loan and the premium for the endowment. Within the package you also pay for life insurance which will repay the loan should you die. However, there is no guarantee your endowment will pay off your mortgage.

When the time comes to making a decision on stopping an endowment and surrendering it, it is important to check your policy and make sure there is some value in doing so.

Early redemption can result in making less than you would have if it carried on for its full term. However, if you need the money, this could be our only solution.

Continuing to pay money into a poorly performing investment could be throwing away hard earned cash.

As well as surrendering it back to the company from whom it was bought from, policyholders also have the option of selling to a third party.

This can also have the added benefit of getting more for your policy than you would if it were sold back to the original issuer.

Different companies will have different requirements when it comes to them buying your endowment.

Usually they would require it to be with-profits or a with-profits whole life policy and have been running for a minimum number of years (the number of depending on the company).

Some will also require a surrender value of at least £1,500. If your policy does not meet the criteria, they will not be able to handle your sale. This would mean the only other option available is what the policy issuer will offer.

The Association of Policy Market Makers (APMM) is the industry body for firms specialising in the buying and selling of endowments. An independent financial advisor could also be helpful in comparing offers and helping you get the most for your policy.

There will be a fee for the work, but it could save you time and energy and also help you achieve the best possible price.

Don’t forget how important your endowment policy is. Like with an investment, you should not suddenly cancel the policy without doing the appropriate research and taking the adequate financial advice.

If you stop payments on a policy, you may lose any life assurance cover that was offered to you. This is an important consideration for your dependents if you are then taken ill or were to die without having set up an alternative method of paying off the policy.

On average around half of the total payout on an endowment if you don’t sell will come on the very last day. This is the so-called terminal bonus and it is not guaranteed. Stop paying in before then and you are likely to lose this. Instead, you will get the benefit of only the annual bonuses added to your policy.

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