Making a Surrender Claim

Transcription

1 Making a Surrender Claim Q1. What is a Surrender Claim? A surrender claim is a voluntary decision made by a policyholder to cash in their policy before the agreed term of the policy has been reached. The TERM being the agreed length of time a policy is to run, eg 10, 15, 20 years. Some other polices may not have a Term, and will only expire on the Death of the policyholder. These polices may be Whole of Life policies, or Bonds. Both of which may still have a surrender value. Q2. Are there any alternatives to making a Surrender Claim? Surrendering, cashing in your policy early may mean that you may receive back less than you have paid in. If you cash in a policy that includes life assurance and other associated policy benefits these will cease. Prior to making any decision to surrender a policy you should take the time to consider what alternatives are available. The alternatives will depend on the type of policy you hold. They may include the following: Where the policy terms and conditions allow, reduce your premium Take a premium holiday (stop paying your premiums), subject to policy terms and conditions. If you want to restart paying premiums you will have to pay any unpaid premiums within a year Stop paying your policy or make the policy paid up Selling your policy on. You may get more money by doing this than cashing in your policy, however this is not guaranteed. If your policy is a Whole of Life or With Profits Endowment contract there are companies that may buy and sell these types of policies. Some companies specialise in "second hand" endowment policies who may offer you a higher sum than the cash surrender value in return for which you would assign your rights to the policy to them. They would then continue with premium payments on the policy in order to receive the benefits at maturity. If you would like to explore this option further, you should be able to find advertisements for such companies on the internet at or in the financial press. The association of Policy Market Makers tel: may also be able to help. Alternatively an Independent Financial Adviser (I.F.A.) may be able to put you in touch with suitable companies. It may be worthwhile for you to obtain quotes from several such companies in order to get the highest price for your endowment. You need to consider whether your policy has been assigned, for example to your mortgage lender or loan company. If the policy has been assigned it means the rights to claiming the policy have been passed to them, therefore before you surrender the policy you will need to contact the relevant organisation. Making a Surrender Claim - Page 1

2 Please note that although The Oddfellows has informed you that this alternative may be available to you, we would stress that we are not actually making any recommendation or providing financial advice. If you require further information about the alternative options available for your particular policy please contact us. Whilst we can provide you with factual information, we cannot advise you what to do. If you require advice or are unsure what action to take you should contact your financial advisor. If you do not have a financial advisor you can find details of a local financial advisor by telephoning IFA Promotion on or via Using the services of a financial advisor may incur charges, please confirm this with the individual financial advisor. The Oddfellows would urge you to strongly consider your decision before returning your Claim Form. Q3. What else should I consider before making a claim? Penalties The Surrender Value of a policy will always be less than the full Maturity Value which would be paid when a policy reaches the end of its Term. The reason for the reduction in value is due a number of factors, these being:- i. The expected amount of premiums to be paid into the policy throughout its full term will not be paid. ii. iii. iv. Any future bonus payments will not be allocated to the policy. A Forfeiture charge is applied to the value to cover any administration costs that would have been paid by you had your policy been allowed to reach Maturity. The Oddfellows reserves the right to apply a Market Value Reduction (M.V.R.) to Surrenders or withdrawals from its With-profits fund. An MVR would allow The Oddfellows to reduce the value of your surrender claim should it be in excess of the value of the underlying assets. The purpose of imposing a MVR is to try and protect the interests of those customers wishing to remain invested. Depending on the type of policy you hold there are dates when no MVR will be applied. Further details of the current level of additional penalties, and confirmation of any MVR free dates can be provided by contacting this office. It must be noted that The Oddfellows would only impose a MVR in extreme circumstances, such as a Stock Market crash, economic down turn or an overwhelming demand for surrender claims. Loss of Life Assurance Cover If your policy contains Life Assurance cover this will cease when your policy is surrendered. It is worth considering how the loss of this cover could affect you, or your next of kin should a death occur. Loss of Sickness Benefit & EPI Cover Some policies contain Sickness Benefit, or Earnings Protection Insurance. It is worth considering how the loss of this cover could affect you should you fall ill in the future. Making a Surrender Claim - Page 2

3 Unit Values Surrendering a policy that is Unit Linked is slightly different to other policies due to the fact that the value of the units is subject to change on a weekly basis. Therefore, no guarantee period can be made on the Surrender Values of these types of policies. The Surrender Value is the total value of the units on the date your claim form is received by The Oddfellows. Partial surrenders available Some policies offer the facility of allowing you to make a Partial surrender of a policy. This in effect means that you could make a withdrawal of a sum less than the total Surrender Value. The result of this would be that you would still retain a policy with The Oddfellows, whilst at the same time freeing up some money for your own personal use. For further details on whether this option is available please contact the Oddfellows. Contact details are provided at the back of this booklet. Q4. Will I have to pay tax on my claim? If your policy is not a Tax Free policy, surrendering it may result in a possible liability to tax. However, this will only affect you if: You pay tax at the higher rate or The taxable part of this claim and any other recent claims take your net annual income, after deduction of personal allowances, over the threshold for higher rate tax. The Oddfellows is obliged to inform you of such instances, and a Statutory Inland Revenue Chargeable Event Certificate will be issued to you if required. In the event of such action you would be advised to retain this document, as you may need to refer to this if you are required to complete a tax return. Q5. How can I make a claim? A request for a Surrender Value can be made either by telephone, letter, or . The contact details for The Oddfellows can be found at the back of this booklet. The Oddfellows endeavours to produce these figures within three working days on receipt of all required claims documentation. However, some calculations may require the assistance of an Actuary, and as such these can sometimes take longer to produce. Once you are in receipt of the Surrender Value of your policy you may then request for Claim Forms to be sent to you. The Surrender Value of your policy is guaranteed for 28 days (except for Unit Linked Policies) after which time a further value would have to be calculated which may result in an increase or decrease in value. Q6. What should I do if I change my mind? If you haven t sent us your Claim Form, and it is your decision not to go ahead with your Surrender Claim, you should contact us immediately to notify us of your decision. Our records will be updated to reflect this, and no loss of cover/investment will occur. You should also ensure your Claim Form is destroyed. If you have sent us your completed Claim Form, but it is your decision not to go ahead with your Surrender Claim, you should contact us immediately. If your Claim HAS NOT been processed we will be able to halt proceedings, our records will be updated to reflect this, and no loss of cover/investment will occur. However, if your Claim HAS been processed then unfortunately we will not be able to reverse the process. Making a Surrender Claim - Page 3

4 Q7. What documents are required to make a claim? The Oddfellows require the following documents to enable settlement of a Surrender Claim:- Your completed Claim Form, signed by yourself Your ORIGINAL Policy Document (With the exception of Ideal Benefit Society Sickness & Savings Policies) For policies where the claim value exceeds 50, we will also require the following;- A Certified Copy of your Birth Certificate, or current UK Passport. A Certified Copy of a recent Utility Bill (not more than 3 months old) The Oddfellows retains the right to request the above documentation for all claims. Q8. What should I do if I can t find my original Policy Document? We understand that policyholders may misplace their policy or are unsure who they hold policies with. If this is the case please contact us, we will check our records to determine whether you hold any policies with The Oddfellows. If you do hold a policy with The Oddfellows we will then issue you with a Lost Policy Indemnity Form, which should be signed, witnessed, and returned to us with all other required documentation. A Lost Policy Indemnity Form is a document that removes all liability to The Oddfellows should the original Policy Document be found in the future, and an attempt to claim be made. Where you hold no information at all about the policies you suspect exist; you may wish to undertake a search using the services of the 'The Unclaimed Register' (UAR) Tel: UAR offer a service that helps individuals trace lost assets. They have a database of unclaimed life policies, pensions, unit trusts holdings and share dividends from companies. UAR charge a fixed fee of 25 for each search. This includes VAT. Please note the Oddfellows takes no responsibility for the information provided in external websites. Q9. What are Certified Documents? A Certified Document is a copy of an original document where an authorised person has had sight of both original and copy. Certification of copies can be performed by any of the following authorised persons An Accountant A Company Director A Judge/Magistrate A Bank Clerk A Solicitor A Doctor A Minister of Religion A Post Office Official Any persons certifying a document must state original seen, sign the document, and print their name and occupation. Original documents can be sent directly to the Oddfellows if none of the above are available, however, should you wish to take this course of action we would urge you to send your documents via recorded delivery due to the unfortunate risk of Identity Theft. Further information on Identity Theft is available on our website All original documents will be promptly returned to you by recorded delivery. Making a Surrender Claim - Page 4

5 Q10. How is my claim processed, and when will I receive payment? Upon receipt of your completed Claim Form and requested documentation, checks are performed to determine if all signatures have been given and adequate proof of identification has been provided. These checks are performed in line with the Financial Conduct Authority (FCA) guidelines on Financial Crime, and identity theft. Details of these guidelines can be found on the FCA s website, as well as the Oddfellows website. Contact details for both sites can be found at the back of this booklet. Once all checks have been carried out your claim is admitted and a settlement cheque despatched to you, unless the policy has been assigned. If the policy has been assigned it means the rights to claiming the policy have been passed onto another organisation, for example to your mortgage lender or loan company. In this case we will contact them first. If the policy has been absolutely assigned it means that ownership has been passed to someone else, for example, your policy has been sold on. In these circumstances we will send the cheque directly to the new owner. If you require your surrender payment to be paid directly in to your bank account we can arrange for the cheque to be paid directly into your account on request. The Oddfellows endeavours to complete this process within three working days on receipt of all required claims documentation. Q11. Where can I go for advice? The Oddfellows can not provide any advice on what course of action you should take. Therefore, we strongly recommend you seek the advice of an Independent Financial Advisor before making any serious decision about your finances. Both the Oddfellows website and Financial Conduct Authority website contain useful information that may help in your decision whether to make a claim or not. Q12. Contact Details Office Opening Hours 9am to 5pm Monday Thursday and 9am to 4pm Friday Telephone No: Fax No: Website: Post: The Insurance Department, The Oddfellows, Oddfellows House, Deansgate, Manchester, M3 3WB insurance.enquiries@oddfellows.co.uk Making a Surrender Claim - Page 5

6 Q13. Where else can I find out further information? The Oddfellows Financial Services web pages provide further information on the following areas: Insurance Department Surrenders and Maturities Bereavement Complaints Feedback The Oddfellows Care & Advice Service Unit Price Information Identity Theft The Money Advice Service has been set up by the government and is funded by a levy on the financial services industry. The service is a free and independent service and is there to help everyone manage their money better by giving clear, unbiased money advice to help people make informed choices. Advice and information is available online, over the phone and face to face: Website: Telephone No: Monday Friday 8am 8pm (excluding bank holidays) Calls should cost no more than 01 or 02 UK-wide calls, and are included in inclusive mobile and landline minutes. To help maintain and improve their service calls may be recorded or monitored. The Oddfellows is the trading name of The Independent Order of Odd Fellows Manchester Unity Friendly Society Limited, Incorporated and registered in England and Wales No. 223F. Registered Office Oddfellows House, Deansgate, Manchester M3 3WB. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority, registration No Tel: Fax: Making a Surrender Claim - Page 6