Melanie Bien: Endowment victim? Make your claim now

Norwich Union (NU) ruffled a few feathers last week by imposing a 12-month time limit on claims by policyholders who believe they were mis-sold their endowment policies.

Norwich Union (NU) ruffled a few feathers last week by imposing a 12-month time limit on claims by policyholders who believe they were mis-sold their endowment policies.

Currently, under Financial Services Authority (FSA) rules, customers have three years in which to make a claim from receiving their first warning that their policy might not be on course to pay off their mortgage. Once they've received a second warning, they have just six months in which to complain.

Now, however, NU policyholders have just 12 months in which to register a claim; if they fail to meet this deadline, tough. NU says it is giving twice as much notice as the FSA demands, but its decision to introduce this time bar could leave many out of pocket.

The specialist claims-handling service Endowment Claims estimates that some 34,000 NU policyholders have complained so far. Given that NU pays compensation on about half of all claims and it has some one million endowment holders - most of whom, Endowments Claims believes, are likely to face losses - thousands are set to miss out if they don't register.

NU is not alone: several insurers, including Friends Provident and Royal & SunAlliance, have already time-barred policyholders with valid compensation claims. The Consumers' Association says that around 700,000 people have already missed out in this way.

However, several big names, including, Prudential and Legal & General, announced last week that they wouldn't follow suit. Many insurers still allow policyholders to complain after the three-year deadline, and the Pru has stated that customers will be able to make a complaint at any stage if they feel they've been mis-sold a policy. The Pru feels that imposing a deadline won't do anything to boost confidence in long-term savings, and it has a point.

But NU insists that a final deadline is fairer to all its with-profits policyholders, and it too has a point as an open-ended complaints system would mean someone who bought their policy 10 years ago could make a mis-selling claim at any time over the next 15 years. This would unbalance the fund because the insurer wouldn't know the exact extent of its liabilities.

NU also believes that an open-ended timeframe for complaints could lead to claims being made for the wrong reason - because a fund has performed badly rather than that policy being mis-sold. Again, this is a valid point: there isn't evidence of widespread mis-selling of endowments, just some exaggeration in potential returns. The stock market has performed so badly for the past few years that the number of policyholders who could face a shortfall is up significantly.

But what amazes me is that anyone who feels they have a claim for mis-selling hasn't done something about it already. It's been months since the first letters were sent out warning of potential endowment shortfalls, so what have policyholders been doing all this time? Apparently, many NU customers haven't complained because they thought they had guarantees to cover any deficit. Four years ago, NU pledged to make up any shortfalls as long as investment growth was 6 per cent or more until the policy matured. If growth were below 6 per cent, it said it would still cover some of the shortfall.

But that doesn't explain the widespread inaction. I know many people can't be bothered to do anything about their finances - but even when they could lose out on thousands of pounds?

Whether time-barring is morally right is almost beside the point: you should have acted already if you feel you were mis-sold a policy.

How do you know if you were a victim of mis-selling? If you weren't aware of the benefits of a repayment mortgage, weren't told about the risks of under-performance with an endowment, or were advised to take out a mortgage that you'll still be paying in retirement, there's a strong chance you were.

And even if your insurer isn't introducing a 12-month time bar, you'd be daft not to act sooner rather than later. If you haven't registered a claim, do so now. Write to your insurer, keeping a record of all documents and correspondence.

m.bien@independent.co.uk

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Recruitment Genius: Customer Service Advisor

    £15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....

    Recruitment Genius: Compliance Manager

    £40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...

    SThree: Talent Acquisition Consultant

    £22500 - £27000 per annum + OTE £45K: SThree: Since our inception in 1986, STh...

    Day In a Page

    Seifeddine Rezgui: What motivated a shy student to kill 38 holidaymakers in Tunisia?

    Making of a killer

    What motivated a shy student to kill 38 holidaymakers in Tunisia?
    UK Heatwave: Temperatures on the tube are going to exceed the legal limit for transporting cattle

    Just when you thought your commute couldn't get any worse...

    Heatwave will see temperatures on the Tube exceed legal limit for transporting cattle
    Exclusive - The Real Stories of Migrant Britain: Swapping Bucharest for London

    The Real Stories of Migrant Britain

    Meet the man who swapped Romania for the UK in a bid to provide for his family, only to discover that the home he left behind wasn't quite what it seemed
    Cheaper energy on the way, but it's not all sunshine and rainbows

    Cheaper energy on the way, but it's not all sunshine and rainbows

    Solar power will help bring down electricity prices over the next five years, according to a new report. But it’s cheap imports of ‘dirty power’ that will lower them the most
    Katy Perry prevented from buying California convent for $14.5m after nuns sell to local businesswoman instead

    No grace of God for Katy Perry as sisters act to stop her buying convent

    Archdiocese sues nuns who turned down star’s $14.5m because they don’t approve of her
    Ajmer: The ancient Indian metropolis chosen to be a 'smart city' where residents would just be happy to have power and running water

    Residents just want water and power in a city chosen to be a ‘smart’ metropolis

    The Indian Government has launched an ambitious plan to transform 100 of its crumbling cities
    Michael Fassbender in 'Macbeth': The Scottish play on film, from Welles to Cheggers

    Something wicked?

    Films of Macbeth don’t always end well - just ask Orson Welles... and Keith Chegwin
    10 best sun creams for body

    10 best sun creams for body

    Make sure you’re protected from head to toe in the heatwave
    Wimbledon 2015: Nick Bollettieri - Milos Raonic has ability to get to the top but he must learn to handle pressure in big games

    Nick Bollettieri's Wimbledon files

    Milos Raonic has ability to get to the top but he must learn to handle pressure in big games
    Women's World Cup 2015: How England's semi-final success could do wonders for both sexes

    There is more than a shiny trophy to be won by England’s World Cup women

    The success of the decidedly non-famous females wearing the Three Lions could do wonders for a ‘man’s game’ riddled with cynicism and greed
    How to stop an asteroid hitting Earth: Would people co-operate to face down a global peril?

    How to stop an asteroid hitting Earth

    Would people cooperate to face a global peril?
    Just one day to find €1.6bn: Greece edges nearer euro exit

    One day to find €1.6bn

    Greece is edging inexorably towards an exit from the euro
    New 'Iron Man' augmented reality technology could help surgeons and firefighters, say scientists

    'Iron Man' augmented reality technology could become reality

    Holographic projections would provide extra information on objects in a person's visual field in real time
    Sugary drinks 'are killing 184,000 adults around the world every year'

    Sugary drinks are killing 184,000 adults around the world every year

    The drinks that should be eliminated from people's diets
    Pride of Place: Historians map out untold LGBT histories of locations throughout UK

    Historians map out untold LGBT histories

    Public are being asked to help improve the map