From what I remember,an Endowment Mortgage was sold on the terms that if the mortgage holder died,at any time within the term of the mortgage, it was paid off,full stop.
You only paid interest on the mortgage, and paid no capital off - i.e. borrow 50K over 25 yrs and after 25 yrs you still owe 50K,but the endowment policy would repay the mortgage,because it was invested wisely by Insurance companies who knew what they were doing and would move your policy around to find the best deals on a daily basis on the stock market.
So, for example, 10yrs in to the mortgage, and a partner dies, the mortgage is paid off-irrespective of what "your Endowment Policy" has made. Covered by those who were still paying in to similar schemes, for the full 25 yrs.
If you went for the full 25yrs you were promised magnificent bonuses over and beyond your mortgage debt, in other words it will easily repay your debt.
I never sold mortgages, I wasn't that clever,but had to deal with enquiries on the subject yonks ago, in a former occupation.
It was a popular scheme,and I reckon nothing wrong with it at the time, and if it paid the mortgage off, that was good.
you wont find a deal like that today though
Topic: Endowment shortfalls :-( (Read 3582 times)