Can anyone remember Endowment mortgages?

[YNK]

Back in the 80's I discovered by accident that my parents had taken out life insurance on me without my knowledge.
Was that a normal thing back then?

Would they perhaps have started an endowment as a planned ‘gift’ to you ?

As pp stated, you could purchase and endowment policy without a mortgage -my BIL did as soon as he started work. By the time he bought a house he had a few years endowment under his belt. Not enough of course to pay his mortgage, but a help.

No they didn't. The life assurance element of the policy did. If the mortgage holder didn't die, the idea was the investment in the endowment part of the policy would have grown enough to pay the mortgage off at the end of the term.

Basically, instead of paying your mortgage, you were investing in a policy that could go up as well as down. If the policy didn't do particularly well, you were liable for the balance of the mortgage it didn't cover.

The banks insisted on a life assurance element so that if the mortgage holder died, they would still get paid.

That sounds very odd.

You don't mean that you were the beneficiary? Ie if something happened to your parents you would get a payout ?

I wonder whether they took out smaller policies for themselves (maybe due to high premiums for them) and topped it up by taking one out for you as well, without your knowledge, and which would pay off their mortgage if you died.

Sounds well shady to me.

I was mis-sold an endowment mortgage. My advisor told me that it was the only mortgage available.
He said that it was totally safe, would pay off the mortgage and leave us with extra.
After 7 years I cut my losses and cashed it in and changed to repayment. I had made nothing but got out before I made a loss.

My ex's brother worked in insurance and he had an endowment policy through him that was unconnected to any mortgage.

I've recently discovered that there were many secrets and lies between my ex and my family that I wasn't privy to and it's got me wondering if this was part of some devious plot.

Back in the day it was very common for people to take out life insurance policies for their children. Primarily to pay for the funeral should the baby die.

My Great Grandparents had on for each of their children Inc my DGF who died in 2015. He had three older siblings who died in childhood so funeral cost would have been on her mind.

No they would have benefitted if I had died I think.

I was married so funeral expenses would not have been their responsibility.

It wouldn’t have made much sense for your DH to go through some sort of convoluted route to benefit from a life insurance policy on you when he could have taken one out himself - it’s perfectly normal for couples to do so, as there would be a demonstrable insurable interest, which is the key criteria.

If you died would your DH have been in a position to pay all your household bills, Inc mortgage and pay your funeral ?

Keeping in mind compassionate leave wasn't always a thing lots of people end up on SSP in the event of bereavement. I think bereavement is only a week for a child not sure if that Inc's adult children. But few would be able to go back to work a week after the death of a child regardless of age.
Could it have been to cover their own household costs in the event of your death?

It might have raised suspicion if he intended to harm me though.

I had one, the forecasts ranged from 4-8% growth over a 25 year term. We switched to a repayment mortgage a while later but I left the investment running to term, paying the monthly premium and it paid out nearer the 4% growth which I used to pay off the balance of the mortgage then, but would not have repaid the capital from the interest only mortgage had we not switched it.

Yes exactly, and the fact so many people didn't bloody understand them is why we had to deal with so many claims in the 2000s when I worked in a bank's mortgage department. Bank financial advisors couldn't explain them and yet sold them as the best option, the average policy holder had no clue what they'd got, people didn't make a backup plan to pay off the mortgage if it went wrong, a lot of them ended up in the buy high sell low trap, it was a recipe for disaster and lots of people got screwed over.

OP an endowment policy had dick all to do with paying out when someone died. There's a world of difference between life insurance and a mortgage. 🤦‍♀️

Can you talk to a GP or a trusted adult about this? Your parents' mortgage in the 80s was nothing to do with your ex or any payout he'd get on your death. It sounds like you might need some real life support as you don't seem to be taking on board what people are saying about the reality of this?

I had one in the 80's and I remember to this day the sales-pitch from the mortgage advisor saying how it would pay off my mortgage and leave me a similar sum to spend as I wish.
Luckily I took note of the warning signs very early on and within just a few years had got a new (repayment) mortgage which I immediately started making overpayments to so it was all paid off within 14yrs.
Ironically, over the years the endowment policy actually did ok (wasn't worth twice the mortgage but it did cover the original sum) so that payout was very welcome and of course there was more to come for being mis-sold in the first place.

I did well out of mine but I had friends and colleagues who were in dire straits for years afterwards.
One never got out of the hole and 5yrs ago (so many years after they took it out) they just walked away from the house with nothing to show for all those years.

Most endowments had a life insurance element to them. That would pay out the assured sum if the person died.

It's only a little niggle and the comments have all helped.
I'm sorry if I have caused you any concern.

We were stung with an endowment policy taken out in 1989. We were told it would pay off the mortgage with some left over. Unfortunately we didn’t get compensation, we tried several times and failed. Fortunately we managed to pay it off early with redundancy payments and savings.

What I do remember during the application, which wouldn’t be allowed now, is that we were asked if we’d had an AIDS test!? When I think back it’s quite a shocker.

Except you're incorrect. I know because I've worked, and advised in the industry for over 24 years.

Endowments were essentially (or most) were like stocks and shares savings now. Will go up and down in value with whatever stock they're invested in. Then there was a life insurance element whereby units would be sold to pay for the life insurance element.

The idea was that your endowment out out perform your mortgage borrowing by the end of the mortgage term. Sadly a lot did not - hence the complaints (quite right too).

As someone else said it was common even up to the 60s and 70s for parents to take policies on their children (not when adult though!) DH's parents had taken out an insurance policy on him when he was younger and we were allowed to continue it and use that as part of our insurance cover for our first endowment mortgage to reduce costs
We were lucky that most of our policies paid out the required amount and a little bit more

Yes they did. However, that was no help in paying off the mortgage off if you didn't die.

I had a normal mortgage as I wasn't willing to take the risk of an endowment. I researched it myself as the banks were pushing them and they sounded a bit too good to be true.

I had to take out life assurance. That was required for any type of mortgage then although I think there may have been exceptions if the mortgage was a low percentage of the house value. Is it not the same now?

Op the life policy your parents had for you would not have paid anything to your ex.
It would have paid out to your parents and covered any expenses they had.

They could if they wanted to chipped in for your funeral.

Did they have a policy for you when you were a child?
Some policy's became 'paid up' after x amount of time but the value they covered didn't increase much, ie Gramps policy taken out in 1919 only paid out a couple hundred in 2015. Not enough to cover the funeral.
Although my GPs had taken out other polices that between them covered funerals.

I'm not sure if you need a life insurance policy now or not. It certainly makes sense if you are a couple.

I definitely didn't my first house my logic was it could be sold to pay of the mortgage should I die. I remember telling some telephone sales woman someone would house my plants 🪴 and teddy 🐻

Our house we had a low loan to value and pensions that would pay out that would cover it.

Yes I remember being asked if I'd had an AIDS test for our mortgage and also when I applied for a loan. It was impossible to get insurance or a long term loan of you'd had a test in those days.