UK ENDOWMENT COMPENSATION
MORTGAGE SHORTFALL

We are a specialist firm dealing with endowment compensation claims for underperforming insurance policies which have been miss sold by a life company, broker or solicitor. We operate on a no win no fee basis and our claims are completely risk free. We guarantee that if you do not receive damages then you will not pay us one penny. If you have received a 'Red' or 'Amber' letter from your life insurance company indicating that your policy is at risk of a shortfall and you would like free advice without obligation then just use the phone number or complete the contact form and an expert insurance actuary who is registered by the Financial Services Authority will give free advice without any further obligation.

There are two main methods of mortgage finance used in the UK. Straight repayment mortgages arise where the borrower of money used to buy a house secures the loan on the property by way of a mortgage and thereafter pays the loan off, usually by monthly instalments to cover the principal sum plus the interest, directly to the lender. An insurance based mortgage occurs where the borrower pays interest only to the lender and pays off the full borrowed sum when a policy of life insurance matures usually 25 years after inception. In the past there was tax benefit associated with this type of repayment method which made it more financially attractive. The disadvantage of this type of policy is that its success depends on the skills of the insurance company in investing the monthly premiums.

Many insurance policies taken out over the last twenty years that were intended to fully pay off mortgage loans will fail to do so. The history of this scandal lies in the fact that the stock market has failed to perform as well as anticipated which has resulted in reduced value of the insurance fund at the date of maturity of the policy.

As a result of the developing mortgage fiasco the Government stepped in and any seller of an insurance based mortgage is liable to pay endowment compensation to members of the public if the policy was ‘miss sold’ as a result of which there has been a financial shortfall on the anticipated value of the maturity fund that was intended to pay off the mortgage in full. There are a number of potential grounds for making a claim although the basic list is not exhaustive and all circumstances, even new situations, must be considered by the insurers, brokers or solicitors against whom a claim is made.

The sellers of insurance are obliged to advise their clients of the anticipated value of their funds every two years and must advise whether of not the fund is on target (green letter), is at risk of not reaching the target (amber letter) or will not reach the target (red letter). The claims procedure is started by way of a formal complaint letter addressed to the seller who must respond and either agree to pay damages subject to negotiations or refuse the claim which can then effectively be appealed.

There are TIME LIMITS and claims must be instigated within three years of receiving a red letter although some insurers are paying compensation even though the three year period has expired.