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 for compensation.

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 to act.

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 dates.

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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