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Options on endowments

It would appear that mortgage endowment policyholders have several options open to them to address any projected potential shortfall in their plan&#39s targeted maturity value:

•Increase their endowment&#39s premium.

•Convert all or part of their loan to a capital and interest basis.

•Make separate alternative provision for any anticipated shortfall.

•Do nothing.

•Complain, alleging that they were missold the endowment (even when they know very well that were not) in the hope that they will be compensated.

Is it any wonder that so many people are choosing the final option? It is the only option with no cost to them (actual or potential) and the worst outcome is that their claim for compensation is unsuccesful. They have nothing to lose.

Just as the industry received many opportunistic claims during the pensions review, so we shall in respect of mortgage endowments – whether or not a wholsale review is instructed.

Paul Lothian

Independent Money Information, Dundee

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