HANG on to your endowments! That was the advice today from a leading Suffolk investment advisor as the controversy over policy mis-selling hots up.Stan Gaskin said many policy holders could be in line for a pleasant surprise when their endowments mature.

By Paul Geater

HANG on to your endowments!

That was the advice today from a leading Suffolk investment advisor as the controversy over policy mis-selling hots up.

Stan Gaskin said many policy holders could be in line for a pleasant surprise when their endowments mature.

"The figures they have been given by insurance companies over the last few years don't really reflect what they will receive in many cases," he said.

Traditional endowment policies, which were sold by insurance companies until about 1990, have two forms of bonus - annual and terminal.

Only annual bonuses are guaranteed - so only these can be taken into account when quotes are given by insurance companies to their policy holders.

"Companies are still paying terminal bonuses, and they make up a large proportion of the final payout.

"It makes absolutely no sense to sell endowment policies early, at their surrender value, just because you're worried that they won't cover your mortgage," said Mr Gaskin.

After 1990 a new form of endowment was sold in units without the traditional bonuses - and statements about their performance more accurately reflect their true value.

"But it's the traditional endowments that are causing most concern, because in many cases these are now reaching maturity and many people are getting very concerned about how much they will pay out," Mr Gaskin said.

Over the last year the value of payouts for endowment policies had dipped significantly - but in most cases they still provided policyholders with a good return.

"The stock market has been improving in recent months and people should remember that the last five years of an endowment is when the value really stacks up," Mr Gaskin added.

"The figures in letters sent out by insurance companies are based on surrender values - and surrendering an endowment which only has a few years to run is the last thing anyone should do.

"Lots of people are now offering to buy endowments off policyholders - but that's a very bad idea. Anyone with concerns should contact an independent financial advisor," he said.

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Has your endowment failed to live up to its promises? Contact the Evening Star Newsdesk, 30 Lower Brook Street, Ipswich, IP4 1AN, e-mail starnews@eveningstar.co.uk or phone 01473-324788.