Traded Endowment Policies
Main article: Endowment selling
Traded endowment policies (TEPs) or second hand endowment policies (SHEPs) are traditional with-profits endowments that have been sold to a new owner part way through their term. The TEP market enables buyers (investors) to buy unwanted endowment policies for more than the surrender value offered by the insurance company. Investors will pay more than the surrender value because the policy has greater value if it is kept in force than if it is terminated early. When a policy is sold, all beneficial rights on the policy are transferred to the new owner. The new owner takes on responsibility for future premium payments and collects the maturity value when the policy matures or the death benefit when the original life assured dies. Policyholders who sell their policies, no longer benefit from the life cover and should consider whether to take out alternative cover. The TEP market deals exclusively with Traditional With Profits policies. The easiest way of determining whether an endowment policy is in this category is to check to see whether it mentions units, indicating it is a Unitised With Profits or Unit Linked policy, if bonuses are in sterling and there is no mention of units then it is probably a traditional With Profits. The other types of policies - “Unit Linked” and “Unitised With Profits” have a performance factor which is dependent directly on current investment market conditions. These are not tradable as the guarantees on the policy are much lower and there is no gap between the surrender value and the market value.
Read more about this topic: Endowment Mortgage
Famous quotes containing the words traded, endowment and/or policies:
“When we traded the buffalo for a mare,
we had no milk to drink,
and we still had droppings to clean up.”
—Punjabi proverb, trans. by Gurinder Singh Mann.
“The parent must not give in to his desire to try to create the child he would like to have, but rather help the child to develop—in his own good time—to the fullest, into what he wishes to be and can be, in line with his natural endowment and as the consequence of his unique life in history.”
—Bruno Bettelheim (20th century)
“Unfortunately, we cannot rely solely on employers seeing that it is in their self-interest to change the workplace. Since the benefits of family-friendly policies are long-term, they may not be immediately visible or quantifiable; companies tend to look for success in the bottom line. On a deeper level, we are asking those in power to change the rules by which they themselves succeeded and with which they identify.”
—Anne C. Weisberg (20th century)