ENDOWMENT COMPLAINT LETTER

The starting point to claim compensation is to send an endowment complaint letter to the firm that made the initial sale. This should take place only following receipt of a ‘red’ letter from the insurance company which indicates that the fund is not on target to meet the anticipated loan and pay it off in full. This letter to the seller of the policy should be sent within three years of receipt of the first red letter or the claim may become time barred and the opportunity to claim compensation may have been lost forever. The letter should contain all of the information necessary to identify you and your policy. It should also outline why you think you were missold your policy.

The endowment complaint letter should contain as much of the following information as possible :-

• Name and address of the company who employed the adviser.
• Endowment policy number and any other references.
• Name and address of the insurance company.
• Date the endowment policy was bought.
• Amount that the policy was anticipated to be worth at maturity.
• Facts that support the allegation that the policy was missold.

There are many reasons for alleging that a policy has been missold including :-

• The advisor did not discuss other methods of financing the loan. A straight repayment mortgage was not considered as an alternative.
• The adviser did not do a fact find to establish needs or requirements and simply executed the policy without consideration of personal circumstances by means of positive assurances of the products viability.
• No information was given on exactly how the monthly premiums would be invested. No mention was made of stock market investments or no warnings were given that the stock market can go down as well as up. There was no discussion of risk factors or the fact that the investment may stagnate or decrease and fail to reach the target sum and fail to pay off the loan at maturity. The adviser did not properly establish attitude to risk.
• The adviser did not explain that this type of investment only makes sense if it is a long term commitment and that early termination would substantially decrease the value and make it a poor investment. The adviser didn't fully explain the fees and charges on the policy including the broker’s commission for sale of the policy which can exceed the first year’s premiums.
• If the adviser effectively guaranteed that the policy value would be enough to pay off the loan or if any other dishonest information induced purchase of the product.
• If payment of premiums was anticipated to continue after retirement the adviser should have ensured that the policyholder would have sufficient income to meet the payments.
• The adviser established that the potential purchaser already had an endowment and advised cashing it in prior to selling a new policy for the full amount. This is an illicit practice known as ‘churning’.

If you would like free advice either complete and send the contact form or call the helpline and an expert adviser will discuss your potential no win no fee compensation claim at no cost to you. If after discussing your claim with us you wish to take the matter no further then you are under no obligation to do so and you will not be charged for our initial advice.