Endowment policies continue to let down homeowners


There are roughly 32 million people with-profits endowment policies with approximately £423 billion of assets invested according to the Association of British Insurers.

Many organisations pay little or no yearly bonus and many policy values are continuing to decline in spite of the increase in share prices over the past few years.

Many analysts blame the fact that considerable holdings in fixed interest securities, such as gilts and corporate bonds are excluded from the profits from a more buoyant stock market.

Endowments policies are a way of repaying mortgage debt and they have declined for many reasons including high costs and low returns and unfair penalties for those who want to cash in their policies before the end date. The outcome of this is that insurance companies stopped selling endowment products and some believe that insurers do not care how the policies perform.

Independent financial advisers, Cru Investment Management, is one of many critics who believe that all with-profit policies should be closed and insurance firms return the money to investors.

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