Encashment of an Endowment

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I will try to be brief and explain as much as I can. Our home was repossessed after a horrible divorce, mortgage was an endowment mortgage and this money is sat gathering dust.

I have been contacted by the lender - but heard nothing for 12 months now, last contact offering payment was just over 6 years ago. When they contacted me, no mention was made of endowment and no promises or offers to pay were made. Thanks to this site...

We would like to cash the endowment in and split the money between our children, but I need it confirming from the lender that they have no interest in this policy anymore. If I write to them, will they a) cash this in for themselves and b) start to contact me again.

It seems a waste that the money is sitting there when it would give our kids a nice little boost right now. Any advice?

Kindest regards.

-- Stiffed (r5ole2004@yahoo.co.uk), July 19, 2004


As I understand it, if the policy was assigned to the lender then they can, and probably have already, cash/ed it in. You should be able to check whether it was assigned by looking at the terms & conditions in your endowment policy or mortgage terms & conditions.

Contacting the lender or the insurer will almost certainly provoke them into contacting you again. Though it's highly likely they'll be chasing you again soon anyway, they usually do after 6 years from date of sale. Not as they would have it to give breathing space, but to cut out any possibility of the borrower taking a case to court where the property has been undersold, for example.

In any event if this policy still exists (which I doubt) I think it would be wiser to use it to reach a negotiated settlement (after having put the lender to strict proof, of course).


-- M Amos (idgroms@hotmail.com), July 19, 2004.

Hello Mark, thank you for your response. Pretty much what we were already thinking.

The policy does still exist, the lender has not cashed it in - not yet anyway. We are looking through all the documents we've received since they first contacted us.

One other question, if we don't reach a "settlement" with them, is it quite likely that this money will just sit in an account without benefiting anyone?


-- Stiffed (r5ole2004@yahoo.co.uk), July 19, 2004.

If the policy is assigned to the insurer then I doubt you will ever be able to touch it, subject to any possible agreement being reached with the lender, of course. You would also need to ask the insurer and check out the terms and conditions to make sure. If it isn't assigned then you can cash it in. I personally would wait until you see how the land lies, or until you decide on your strategy for dealing with this before attempting to access it.



-- M Amos (idgroms@hotmail.com), July 20, 2004.

I think - and I need to check - that it is asssigned to the insurer, who want a letter from the lender stating they have no interest in it.

Snowballs chance in Hell of getting a positive result?

-- stiffed (r5ole2004@yahoo.co.uk), July 21, 2004.


Hope this helps you!

I had an assortment of endowement policies on my past mortgage (4 in all). 3 of them were assigned to the lender and in these cases the lender had the origonal policies (I had copies), and the lender surrendered them all when the mortgage was redeemed.

In the case of the 4th policy I had the origonal policy and guess what?? the lender didn't surrender it.


-- (stephen.pooley@ntlworld.com), July 21, 2004.

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