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Endowment Mortgages |
There has been a welter of Press coverage
on this topic over many years. Endowment mortgages are
the method used by borrowers to repay their mortgage
by amassing the capital necessary to repay their loan,
separate from the interest they pay back to the lender,
using a life insurance and savings contract.
Typically the plan will encompass life insurance and
an element of savings targeted to repay the lender in
the event of during the life of the contract and by
provision of a maturity value should all lives assured
survive the term of the policy.
Due to a combination of economic factors, this method
of saving has become increasingly unfashionable and
in many cases maligned by the public, the Regulator
and the Press alike. We too have major reservations
about many of the methods and motivations behind the
sale of many policies. However, we tend to speak as
we find. It is a fact that Lawrence Miller & Co
has never come across a contract that it has arranged
or over which it has assumed authority where the maturity
value has not met its target.
For example, if you click on this link
you will find a Maturity statement issued by Standard
Life to one of our clients in March 2004. Our clients
have given their permission for us to use the Statement.
It confirms that the policy, a conventional with-profits
mortgage endowment contract over 25 years, produced
a maturity value, in the teeth of the worst period of
stock-market performance for 40 years, 48% above its
target maturity value.
This information is not advice; it is not a recommendation
nor, however, is it a projection. It is simply a statement
of fact.
In our opinion, the FSA should categorise companies
on their ability to see their policy holders through
good times and bad. Not all endowments are the same
and not all companies are the same. The FSA should have
the courage to help consumers make the distinction.
If you have a concern over your policy please contact
us.
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