Close Brothers launches with-profits endowment loan product

That is assuming the 'terminal' bonuses haven't completely disappeared by the maturity date - which is what appears to be happening in most cases.

The exception appears to be Prudential who still declare them on an annual basis and to be fair, appear to add them as a percentage of a reduced basic sum assured on surrender to reflect the fact that the customer is only paying the premiums on the policy to that point in time as opposed to the full term and still earns the annual and terminal bonuses attaching at the point of surrender proportionately.

This still doesn't alter the fact that terminal bonuses can be reduced/removed at any point up to and including the day before maturity if they so wish.

Traditional with profits policies are getting increasingly rare as they are maturing, leaving the market full of 'unitised' with profits policies which build up nothing in the way of guaranteed benefits (other than the initial sum assured or guaranteed death benefit) as the unit price and value can be altered retrospectively.

I have seen 25 year mortgage endowments go from green to red at the 23 year point - with maturity values then being lower than the surrender value plus premiums at that point because the customer bought the 'terminal bonus at maturity myth'.

It makes sense for endowment providers to continue this fairytale as the article proves. There are some £30 billion invested in endowment policies in the UK, a tidy sum for the providers to have control and use of with no real ability for the policyholder to be able to see whether they will actually get a reasonable return on their investment until its too late!

The providers can over charge for the life cover and other benefits along with stripping out running costs without the customer seeing them.

The only policies that can be traded/sold are Traditional With Profits and if a customer has one it's worth putting it on the Traded Endowment Market because the response you get from the market makers will give you a good idea of the likelihood of it actually making any money over and above its present surrender value.

Any thoughts anyone?

Traditional with profits where the guaranteed sum assured started as the full amount of the mortgage were risk free investments that guaranteed to pay off you mortgage and leave you with a lump sum. The issues started when low cost endowments entered the scene and people bought them making an allowance for future bonuses to bring the lower guaranteed sum assured up to the value of the mortgage.

And can an editor please look at this line - it does not make sense "Currently providesPrudential and Scottish Mortgage are the offer loans against their own endowment policies."

Currently providesPrudential and Scottish Mortgage are the offer loans against their own endowment policies.

Is this English? Do they teach grammar at journalist school?