If you want to claim about miselling of an endowment you must do it within so many (can't remember how many) years of first receiving a red warning letter. You need to prove that you were missold - usual case is that risks may not have been explained, also, as he was a young lad at the time I presume with no dependants, he would have no need for the life cover within the policy another reason for misselling. In terms of compensation, what you get is redress, they make a calculation (basis of calc defined b FOS/FSA) of what it would have cost to have a repayment v what you have been paying and how much balance you would have left if you had opted for a repayment. The money is then meant to allow you to convert to a repayment if you want.
The thing with time barring is that they need to evidence that they issued you a red letter and confirm when that was. Many companies no longer retain copies of their issued correspondence. They rely on the ability to recreate the letter that you should have had. If ithis is the case, it is worth complaining about mis-selling and if they respond that you are time barred, get them to prove that you were issued a letter. They may find this difficult to do........but don't tell them I told you ;o)
As for what to do about the shortfall, depends on what situation you are in. I would be tempted to part convert your mortgage to repayment or take out a new mortgage to cover the difference. That's if you are still relying on the proceeds to repay your mortgage loan. If you expect the shortfall to be small, you could let it run it's course and just pay the extra at the end or take a loan to pay it of, or just just sell up and move and pay them the shortfall out of the proceeds.