Fax : +44(0) 845 862 1954
THE REAL STORY
|Back in the early sixties Drummond & Co were in the
forefront of the move from Endowment Assurance policies to
equity-linked. The major Assurance companies of the time vehmently
opposed these new types of policy. In fact, one head of a leading
company called equity linked "criminal".
We realised that this was a desperate ploy by those companies to protect the tremendous profitability of "Endowment" contracts. The mystic world of Assurance didn't have to admit to the underlying investments or charges of such policies. Meanwhile the Equity-linked policies were transparent.
Financial institutions are in business to make money many of them employ actuaries to work out future probabilities. However in this changing world those actuaries get it terribly wrong.
Do the companies come out with the truth or do they find some other reason to pacify the public.?
Two recent happenings have shown how Insurance/ Assurance companies have got it so wrong.
The first instance is over endowment policies. For years actuaries worked it out that most policies were only going to run for an average of 7 years. Therefore few were going to last the full term of 25-30 years.
So they decided
two different types of bonuses. Interim and terminal bonuses were
The idea being that those people surrendering early would get less and
extra amount withheld from them would be paid as a terminal bonus
enhancing the reputation of that company with high returns.
by the terminal bonuses were then used to show what high returns people
their endowment policies had received. The % of endowment
reaching maturity was minimal.
This was fine as long as most policies were surrendered within 7 years.
not foresee was the growth in the buying and selling of second hand
Because this trade grew the terminal bonuses became smaller. Simple and
explainable. But do the companies explain it - No.
Yet this writer
witnessed a disagreement between a Senior Executive of Scottish Widdows
and a leading purchaser of Second Hand policies in 1991. The SW
Executive realised what the result would be. But did that stop him
allowing past performance being used to sell new endowments?
Instead as seen
recent Panorama programme they state that the investment returns are
as good as before. How ridiculous during a market boom.
It was like when
were fined by the FSA for breaches of their selling methods. They were
fined large amounts. Was it the company who paid those fines ? or were
they taken out of policyholders funds?
Watch this space on the story of Equitable life.
So it can be
it is always the client who ends up paying. The companies still have to
massive profits for their policy holders.
Where are the media to report the truth? Maybe busy taking advertising revenue from the aforementioned companies.
We, at Drummond & Co, have more than 35 years experience of the workings of those assurance companies and have chronicled their mis-information throughout that period.
We have kept a log on how they operate and the high fines they used to be able to charge on early surrenders. In many cases the higher the penalty the more the terminal bonus. Thus they rarely relied on Stock market results. So why blame Stock market results now? Simply because the truth is not palitable.
Further ,through the pages of The Informed Investor, we shall keep the public informed on the progress of the legal proceedings and ensure, as we have done fighting NIC mitigation schemes, that people power can combat the strength and wealth of the financial institutions.
Like our NIC system we have created a "fighting" fund to combat the offending companies. So the more of you that join the stronger we all become.
You owe it to you and your family to join.
|Think all banks are the same? Think
again. No hassles. No
late payments. No unexpected charges. Just real help with your finances.
Welcome to thinkbanking.
|No credit check bank accounts|
|Bank accounts for bad credit||IVA bank accounts||Bankrupt bank accounts|
Ways to bank with us
current account that helps you budget
Our account has a budgeting service built-in. We'll look after all your regular bills and payments, so you know exactly what you can spend on the good things in life. You get:
thinkbanking Debit MasterCard®
Our thinkbanking card gives you instant access to your cash.
Compare a wide range of mortgages and find the best deals from a panel of lenders.
Get a quote
Our free credit card comparison table makes it easy to compare the best offers.
Whether you're saving for the long or short term, our savings account could be right for you.
How our account works
See our simple step-by-step guide to how the thinkbanking account works.
Find out how it works
We're not like other banks. Find out more about our values, awards and charity work.
Read more about us
|No credit check bank accounts||Bank accounts for bad credit|