Lies, Damned Lies
Embattled endowment policy holders, that's you and me folks, suffered another kick in the "cahoonas" yesterday; as Standard Life reneged on its promise to cover endowment shortfalls.
The reason that they reneged on this promise, was in effect to make the company look more attractive to investors when it floats in 2006.
The promise, known as the "Standard Life Mortgage Endowment Promise", was made four years ago. Standard Life had pledged to provide financial support to customers with endowments that failed to meet their target value.
Seemingly that promise was bullshit.
The cover will now only apply to those polices maturing before the end of 2005.
This move is expected to adversely affect 600000 policy holders with underperforming endowments.
This is bad news for policy holders in Norwich Union, which had also given a similar undertaking to attract customers. It is likely that Norwich Union will feel free to renege on their promise, now that they have no pressure to keep it. They have stated that they intend to honour it.
Standard Life has also set May 2006 as the deadline for complaining about endowment shortfalls.
As if this was not bad enough, Standard Life also announced that they will be cutting top ups on other policies by 40%-60%. This will exacerbate the size of policyholders' shortfalls.
Maybe disgruntled policy holders should buy a stake in the company, when it floats, then sack the directors?
The problem being, that most policy holders are now fretting as to where they will find the money to cover the shortfall on their underperforming useless endowment policies.