BS Cashing in Endowment : LUSENET : Repossession : One Thread

Someone has asked me whether a BS has the right to cash in an endowment policy on a mortgaged property that has been repossessed,the person this happened to was never advised of the fact either. Can anyone advise me on this?

-- M Amos (, April 25, 2002


Iwasduped, Vic and Stephen.... the ability of you people to answer questions like that amazes me. You are fab!


-- Lee (, April 27, 2002.

Yes they do have the right, unless they are specifically excluded as a named beneficiary. An endowment linked to property is linked by way of mortgage security - most Lender's are in fact named somewhere in the endowment paperwork as having first dibs. Sorry.

-- Too scared to say (, April 25, 2002.

Actually it depends upon whether their interest in the policy 'was noted'by the insurance company, not all policies in the old days were lodged with the lender, nor did they always insist on registering their interest with the insurance company.

A lot depends on when you took it out, the lender (and their corporate policy on such matters) (procedures now probably tightened up).

The older the case the better, when best practise was not always followed.

Any further information you can post?

Good Luck ! Vic

-- Vic Harper (, April 25, 2002.

The endowment was taken out with Sun Alliance back in 1988 - I called them to see if I still had a bonus amount with them and that's when they told me the policy had been cash surrendered to the Building Society in 1996 - they gave me reference no. and amount being in excess of 3,700 pounds. No-one ever told me this had been done - the BS has still not informed me although they claim the shortfall owed is 34,700 and are chasing me for 30,900 plus interest so I imagine the difference is the cashed policy. Anyhow, I am interested to see if my SARN brings up any confirmation of cashed policy.

-- jen p (, April 25, 2002.


The following is based on my own experiance with Sun Alliance (I also had a policy with them in the late Eighties).

If the policy was "assigned" to the lender, and if you haven't kept up your monthly payments, then the lender has the right under it's "power of sale" to request the proceeds of the policy from the insurance company. In such cases the lender has the original policy and the borrower only has a copy of the policy.

The proceeds must be used to pay off any arrears on the mortgage account or to reduce the balance of the account.

If the lender has denied receiving the proceeds, then you must do two things. Request a photocopy of the cheque made out to your lender from Sun Alliance, also ask for a copy of the "discharge" of the policy and all other correspondence relating to it between Sun Alliance and your lender. - they WILL have copies, I guarantee it. Also ask your lender for a list of transactions for your mortgage account for the periods before and after repossession - you need these to verify where the money has gone/or perhaps hasn't gone as the case may be.

They will probably resist, and may even ask you to pay for them, but be very persistant.

I write this assuming you have a completion statement from your lender/chaser and there are no figures on it relating to endowment policies.

-- (, April 27, 2002.

I second your comment Lee, thanks for the replies folks. I'm sure Jen will be happy with that info.

By the way, Lee, glad to hear from you.I was getting worried the building societies had finally got to you.

Regards, Mark.

-- M Amos (, April 28, 2002.

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