In 1978, a friend effected a 25-year low-cost Standard Life with-profits endowment policy at a monthly premium of £16.52.
This month, the policy matures at £18,123, an investment yield of 9 per cent free of tax, ignoring the premium tax relief.
In February 2003, Standard gave written confirmation of “illustrative maturity values” as:
@ 4% pa return £14,500
@ 8% return £14,900
The £18,123 amount is 22 per cent higher than even the 8 per cent projection.
Standard clearly cannot give anything near an accurate return even five months from a maturity date. What belief should be placed on current Standard mortgage endowment policy illustrative maturity values?
Chartered insurance broker,
MPW (Carlisle), Carlisle