The benefit of life insurance covering

the benefit of life insurance covering

There is much discussion in the financial sector regarding the endowment mortgage misselling scandal that has affected up to 8.5 million policyholders in the UK.

Endowments policies were sold heavily in the UK during the 80′s and 90′s as a cheap yet secure method of repaying your mortgage debt. The concept was extremely attractive to customers because in purchasing such a policy you had the benefit of a rolling investment that would meet the target amount (the mortgage debt) and then provide a bonus on top which could be used as a savings plan. In addition to this you also had the benefit of life insurance covering the full target amount payable upon death.

These plans were not however as secure as they seemed. All monies paid into the plans would be invested on stock markets around the world and this meant that any return on investment would be very much subject to the performance of the global markets. When the markets suffered a fall in growth – so inevitably would the endowment investment.