Endowment Misselling – Taking Stock Of Your Options

2007-03-08 10:33:40

( Business )



The shadow of endowment misselling has hung heavily over financial markets. Those who bought policies from insurance agents selling endowments as a way to repay home mortgages now find that the fund will fall short. Insurers have been flooded by complaints of endowment misselling, as policyholders try to find the resources to pay their mortgages.

If you bought such an endowment policy and if you recently got a warning from your insurer that it will fall short, then you may have been the victim of endowment misselling. You have two basic options.

You can file a complaint about endowment miss selling and ask for compensation with the government regulator. Before you do that, however, it will be necessary to first contact your insurer. Insurers field endowment misselling complaints by reviewing information about how the agent selling endowments handled the selling process. If there is evidence that you were not fully informed of the risks, the insurer may consider paying you compensation. You and your insurer will have to agree on the formula for that. You will probably want that, at the very least, you will get the amount that a normal repayment mortgage would have given you over the same period.

Note that the warning letter from your insurer carries a deadline. You will have only three years after receipt within which you can complain. You cannot complain about how the endowment has performed, but you can complain about how it was sold. Some insurers, in fact, want to introduce a six-month deadline notice for endowment misselling complaints to be filed. If you should decide to take this route, you must move fast.

Your other basic option is to cash in your policy. Cashing it in means you either surrender the policy to the insurer for its cash-surrender value, or you sell the policy in the traded endowment policies market. Selling endowments in the secondary market may bring you a higher amount – maybe as much as thirty percent more – than the insurer’s cash-surrender value. If you take this option, you will have to look for a good market maker to help you in selling endowments in this market. Demand for these policies have picked up lately, so selling endowments should not be difficult.

Whatever option you choose to take, you now have a chance to get some money back and pay off that mortgage.


All rights Reserved © Tradenet Services srl
Do not duplicate or redistribute in any form.