Hello, I would like to enquire if an endowment policy taken out to cover a mortgage is actually a contract and does an individual have any rights if there is a significant shortfall and the policyholder has probably missed the official deadline for complaining? Many thanks, XXXXX XXXXX Salisbury,XXX@XXXXXX.XXX
Province/Country relating to question : England
Nothing yet, I am dismayed that the general advice from the FSA is along the lines of, if there is likely to be a shortfall, take out some more investments to ensure you can pay off your mortgage, i.e throw some more good money after bad. I have potential shortfalls on 2 policies. Many thanks.
Yes an endowment policy to cover your mortgage is a contract between the parties.
This is because it is agreed between the parties that you will pay a fixed amount monthly which will be invested on your behalf for a fee with the view to providing you with sufficient amount to pay off your mortgage at the end of the term. The policy is designed to give you enough to pay off your mortgage but in most instances this is not guaranteed.
In recent times many people have found themselves in your situation where they do not have sufficient funds in their policy to cover their mortgage. This is due to the decline in the economy which has resulted in many investments performing poorly. Unfortunately the reason you are struggling to find helpful information is because unless the seller of your policy guaranteed you that the policy would pay off your mortgage, you have no legal recourse against them.
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9 years post graduate experience in general commerical law
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