24 August 2019

Endowment Policies

This product is no longer available to new customers

An Endowment is a savings policy that pays a lump sum, when the policyholder survives to the end of the endowment term, or in the event of the earlier death of the life assured.

Overview

  • This product is no longer available for new business.
  • Your endowment policy is for a set period of time (term), which is decided at the outset.
  • When you invested your money was pooled together with lots of other investors’ money in our ‘with-profits fund’. This fund is managed by a team of experienced investment professionals.
  • The fund's investment strategy is to achieve growth in the value of the fund by investing in a wide range of assets, comprising of UK and overseas shares, government and other bonds, property, cash, alternative and other investments.
  • It is possible to stop paying the premiums into your Endowment policy; however this will reduce the value of your policy.
  • You can surrender your policy at any time. We will pay a fair value based on the premiums you have paid, over the period you have held the investment. If you decide to surrender your policy, you should consider whether you have sufficient life cover to meet your needs. You can contact our Customer Contact Centre for further information.
  • And because some of us want to invest for longer than others, we also have to make sure that everyone who invests in the ‘with profits fund’ is paid out a fair value for their investment when they come to cash it in.
  • So, any profits from the investments made by our expert Fund Managers are added back to the ‘with profits fund’. And then shared-out amongst all the investors, by adding bonuses to their investments.
  • Bonuses are shared out once a year (annual bonus), and a ‘final bonus’ may also be added to your policy when you make a claim.
  • At maturity or death, we will pay you at least your guaranteed sum assured plus any bonuses added to date.

Investment detail

Your savings, together with other with-profits policyholders’ money, are invested in our Long Term Business Fund (LTBF).

The fund's investment strategy is to achieve growth in the value of the fund by investing in a wide range of assets, comprising of UK and overseas shares, government and other bonds, property, cash, alternative and other investments. We hold a wide range of assets so that there is less risk to the value of the fund than if we invested mainly in a single type of asset, which may do very well or very badly.

We manage the investments in the fund in line with our customer-led Responsible Shareholding programme.

Bonuses

We aim to add annual bonuses to your policy and may also add a final bonus on death or maturity. This is your share of the profits from the investment returns. There is no guarantee that we will pay bonuses in any particular year.

Guaranteed minimum payout

At maturity or death of the life assured within the policy term, we will pay you at least the amount of your guaranteed sum assured plus any bonuses we have already added.

Analysis & performance

Performance for your endowment and mortgage endowment plans are detailed in your annual bonus certificates (Please note that Endowment plans taken out pre 1994 will not receive bonus certificates. If this applies to you and you wish to receive bonus certificates, please contact us on the number above).

The chart below shows the different types of assets we held as at 31 December 2015 for With-Profits policies such as yours.

 

In addition to the above information, the attached product guide is intended to provide you with an ‘at a glance’ guide to the most important features of your Endowment policy.

Download Adobe Acrobat

(Documentation will open as a PDF in a new window).

We produce a document called ‘The Principles and Practices of Financial Management’ which explains how we are managing the with-profits fund. You can find the latest version here.

We also produce a ‘customer friendly’ version of ‘The Principles and Practices of Financial Management’ which you may prefer, you can find the latest version here.

Other considerations

Information on Red, Amber, Green letters

If your policy is prefixed by the letters AG, this means that you have a low-cost endowment policy which was designed to offer customers a lower cost alternative repayment vehicle for an interest only mortgage than a more traditional endowment policy.

Low-cost endowment policies consist of 2 elements – a guaranteed death benefit (usually the mortgage amount) and a lower basic sum assured. The lower basic sum assured meant the monthly cost to customers was lower, with the aim that bonuses added to the policy over the term of the plan would provide sufficient funds at maturity to repay the mortgage amount by achieving the ‘target amount’.

Mortgage Endowment re-projection statements are issued to low-cost endowment policyholders to give customers an indication of what their projected maturity value could be and whether this is on course to achieve their target amount. The projected maturity value is calculated using our best estimate of how the underlying funds will perform in the future, and the assumed growth rates used are capped by our regulators.

You will have received a Red, Amber or Green letter. This letter provides information to whether your policy is on track to repay the target amount of guaranteed death benefit on the basis of an assumed growth rate each year. Please read the factsheets enclosed with this letter and remember you’ll still need to check that your policy remains on track in future years. Growth rates are not guaranteed and a lower growth rate assumption may be more appropriate in the 5 years leading up to maturity. Should you require any additional information on this matter or wish to discuss your options, please contact our customer contact centre on 03456 057777.

Unclaimed policies

If you believe that you may have an existing policy with Co-operative Investments, please contact our customer contact centre on 03456 057777 and we will endeavour to locate your plan. You will be required to verify your identity before we are able to provide you with any plan information.

Alternatives to the surrenders of your policy

Although you are able to cash in your policy early, your life assurance policy is designed to provide benefits at the end of a set term, or on the earlier death of the life assured. The costs of setting up your policy are met from the premiums you have paid, whether or not you keep the policy in force. If you surrender your policy early, you may therefore get back less than you have paid in.

Your policy may include valuable guarantees, such as the guaranteed sum assured and annual bonuses added, which only apply at the end of the term or on earlier death of the life assured. By surrendering your policy early you will not benefit from these guarantees. You should consider carefully the full implications of taking such a step and whether you have any other source of available funds to provide you with the money you need.

Should you wish to consider surrendering your policy, there are alternatives to the surrender of your policy. These would include making your policy paid up, alteration to your policy, selling your policy. Should you require any additional information on this matter or wish to discuss your options, please contact our customer contact centre on 03456 057777.

Download Adobe Acrobat

In addition to the above information, the attached product guide is intended to provide you with alternate options to surrendering your policy (Documentation will open as a PDF in a new window).

 

Download Adobe Acrobat

In addition to the above information, the attached product guide is intended to provide you with an ‘at a glance’ guide to the most important features of your Endowment Assurance policy: (Documentation will open as a PDF in a new window).

 

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03456 057777

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The Royal London Mutual Insurance Society Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered in England and Wales number 99064. Registered office: 55 Gracechurch Street, London, EC3V 0RL. RL Marketing (CIS) Limited is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales number 3390839. Registered office: 55 Gracechurch Street, London, EC3V 0RL. RLUM Limited is authorised and regulated by the Financial Conduct Authority. Registered in

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