The Endowment Diary

The Endowment Diary

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The Endowment Mis-selling Debacle - one of the UK's worst financial scandals

Monday, May 19, 2008

The 9 Million Shortfall

The 9 Million Shortfall

Over 10 million endowment policies were sold to hapless mortgage applicants in the 1980's and 1990's. The policyholders were assured by the insurance companies that the endowments would pay off the mortgage (why buy it if it wasn't fit for purpose?) and that there may even be a surplus.

Unfortunately those assurances, as we are all well aware, were worthless.

Fairinvestment.co.uk have conducted research that shows that a staggering 86% of endowment policy holders (who were questioned) have been warned that their endowment policy will not be enough to pay off the mortgage.

Could the companies that sold and manage these useless products please explain to us exactly what is the purpose of these useless products, if they are not going to pay off the mortgage?

Within those who expect a shortfall, 41% are expecting a deficit of 25% and 23% are expecting ashortfall of a mind numbing 50%.

What exactly have the companies that have been "manging" these policies been doing with their policyholders' monthly contributions?

The figures confirm government findings, which in 2003 estimated that 80% of endowment policies would fail to fulfill their intended purpose.

So, once again, let me give the companies that sold and manage these useless policies the opportunity to answer this question:

Given that these products are incapable of paying off policyholders' mortgages, what exactly are they good for and why did you sell them in the first place?

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