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My offer from Legal and General - re Endowment

Hi Folks.

Ive just had a compensation offer from L+G regarding an endowment that I was mis-sold in 1987. The have offered redress that would put me in the position I would be in had I taken a repayment mortgage at the outset.

I got a copy of their calculations, and am satisfied with how they came to their figures.

Part of the calculation is based on the surrender value of the policy. I have looked into keeping the policy and selling it, but noone seems to be willing to offer more than the current surrender value (which currently stands at £18213.60. My original mortgage was £50K)

L&Gs bonus announcement is due at the end of the month. (26th)

Is it likely that the surrender value will rise after the bonus statement, or is there a high possibility that the surrender value may, in fact, fall ?? Im just not sure if I should sit tight, or bite their hand off !! I guess I am assuming that last years relatively strong equity performance should be a good omen, but would the bonus figures be badly effected simply by the number of mis-selling claims ?

Any thoughts, insights, guidance ?

Cheers !

Reply to
Distracted Dan
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In message , Distracted Dan writes

How much of your surrender value is 'terminal bonus'? Are they appplying any fomr of penalty?

Reply to
john boyle

None of it is "terminal bonus" (as Im surrendering it before maturity). The surrender value is net of a market value adjustment.

As the amount being offered is made up of surrender and redress, a higher surrender value would result in lower redress (and vice versa).

Im thinking that I should probably accept the offer, as none of the endowment trading companies are interested in offering me more than the surrender value. I guess this MUST tell me something, seeing as its their livleyhhood knowing the future value of these things, and Im sure they are also well aware of the upcoming bonus announcement and its possible effect.

Cheers ! Danny

Reply to
Distracted Dan

In message , Distracted Dan writes

These days, surrendering before maturity does not necessarily deny you some terminal bonus, so you can not assume that you are not getting any TB.

How much is the MVA?

In answer to your original question, the current reversionary bonuses wont change after the declaration of this years bonus, but any terminal bonus included in your surrender value could drop. Also the MVA could change either way. The declaration of the new bonus, in itself, wont be detremental to the futre s/v, but the TB and MVA might.

Reply to
john boyle

That last paragraph is the decider. If Im going to take their offer, the SV value, or any change in MVA or TB is irrelevant, as any gain in in surrender value will be offset by a reduction in redress.

Im assuming the endowment traders Ive been speaking to think that there is a possibility the sv of this policy might be hit by a reduction in TB and/or and increase in MVA.

I think I'll post off my acceptance today and be done with it.

Thanks for your help !

- Dan

Reply to
Distracted Dan

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