Norwich Reduces Payouts
Norwich Union have dealt a body blow to their long suffering endowment mortgage policyholders, who have been warned to expect a low payout this year.
This is despite the fact that Norwich's main profits fund achieved an overall return of 17.7% before tax.
A policyholder with a 25-year, £50 a month Norwich Union endowment mortgage maturing this month will receive 4% less than he would have done if the policy were to have matured in 2005.
"In general, shorter-term policies show increases or small decreases compared to equivalent policies maturing a year ago, while those with a term of 20 and 25 years will generally be lower."
However, Norwich Union went on to say that in many cases an increase is seen when the surrender value of the policy a year ago is compared to the maturity value now.
Well of course it would, surrender values are normally lower than maturity values!
Please don't treat your policyholders in such a patronising manner.