ENDOWMENT SHORTFALL

The situation is not much better at Scottish Widows, Clerical Medical or Norwich Union, where three in five policies will come up short. Standard Life will have around 50% of their policy holders with shortfall.

The crisis presents a terrible conundrum to others with endowment policies. Should they “Stick Twist or Fold?”

If you are sent a letter stating that your endowment may have a shortfall, don’t ignore it. You need to consider if it would be better to sell the policy, cash it in or keep going with it.

As a starting point ask you insurance company for a surrender value and a paid up value. If you ask for a projected value also it will send you the figures based on 4, 6 and 8% investment growth.

You would be wise to totally ignore the 6 and 8% growth rate projections until you see pigs flying past your kitchen window. Even 4% looks optimistic during the current climate.

We suggest that you speak to an Independent Financial Adviser for expert help and advice.

If you are considering switching to a repayment mortgage you may benefit from talking to one of our advisers.

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