Endowment policies explained
This investment reflects a medium attitude to risk. It could give a higher rate of return than a bank or building society over the long term, from a balanced mix of lower and higher risk assets. But the cash-in value of your investment may go down as well as up and you could get back less than you invested.
We explain how we manage the with profits fund in the Principles & Practices of Financial Management (PPFM) of the RLCIS OB & IB Fund document (PDF - 0.9MB).
The endowment policy you chose may benefit from additional periodical payments throughout your policy term.
We aim to add annual bonuses to your policy and may also add a final bonus on death or maturity.
Guaranteed minimum payout
We'll pay you at least the amount of your guaranteed sum assured plus any bonuses we have already added.
Certain endowment policies are bought for the sole and exclusive benefit of a child.
Your policy may cover several people
Your policy may cover you, your partner, both of you, or your children depending on the type of endowment you bought and what was specified when the policy was taken out. Cover for you and your partner is known as ‘joint life’ cover.
Please check your policy schedule to see who is covered. For joint life policies, we will only pay out one lump sum if either person dies within the term of the policy. Cover will then stop, so the second person will no longer be covered, and there will be no lump sum payable on maturity.
You can surrender your policy at any time
We'll pay a fair value based on the premiums you've paid, plus any investment return we've achieved, less any expenses we've incurred.
If you decide to surrender your policy, you should think about whether you have sufficient life cover to meet your needs. You can contact our Customer Contact Centre on 0345 605 7777 for details of any existing policies you may hold with us.
If you wish to discuss if the level of cover you have is suitable, we recommend that you seek advice from your financial adviser. If you don’t have one, you can use our Find a Financial Adviser tool to find one in your area.
Additional Income Benefit
You may have bought Income Benefit cover with your Endowment Policy. This may have been optional or it could have been automatically built in to the endowment you bought. This benefit provides an additional payout of a regular income if a person covered by the policy dies.
The income will be paid up to the end of the Income Benefit policy term and this could be a different term to that of your Endowment policy. The regular income can usually be converted to a lump sum. We'll let you know if this is possible at the time of claim.
The Income Benefit part of your policy does not have an investment element and so there is no surrender value. Please check your original paperwork for details of the full benefits on your Endowment policy. If you have any questions, please call our Customer Contact Centre.
Additional periodical payments
The endowment policy you chose may benefit from additional periodical payments throughout your policy term. Check your original documentation for details of these payments. We'll contact you when we are due to make these payments.
Many different types of endowments have been sold over the years. Please check your original policy documents for other product(s) features that may apply to your policy.
We supplied a contract for the product(s) to you when you bought the policy. You should refer to this and any contract endorsement which we may have sent you for full information. In the event of conflict between this guide and any contract, the contract will prevail.