Thursday, June 28, 2007

Trading in Endowment Policies

There is a website service (in the UK) that allows a policyholder to find someone who is willing to buy his endowment policy for a better price than the cash value offered by his insurance company.

The advertisement says:

* We offer an exclusive 'execution-only' service for people wishing to sell their unwanted endowment policies.

* Shop around the endowment marketplace in order to try and find you the best offer for selling your endowment policy.

* We will usually get you a number of offers for your endowment policy.

This is how the "trading" works. The insurance company has a monopoly of your endowment policy, and will offer you a poor value. This allows them to make a profit when you surrender your policy.

By approaching the market place, you may be able to find another buyer who can give you a higher value. They will keep the policy till maturity and still make a profit over their funding cost.

I believe that someone tried to introduce this service in Singapore. But I am not aware if it has been successful.
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3 comments:

Anonymous said...

Dear Mr. Tan,
I have tried to contact these people but the reply is that they only do it for UK based insurance companies. They have not heard of NTUC Income so it drew a blank. Do let me know if there is any company doing it in Singapore as I intend to sell my policies to them.

June 29, 2007 4:44 AM
Tan Kin Lian said...

Dear Roger,

I am not aware about a similar service that is active in Singapore.

If you wish to surrender a NTUC Income policy, you will probably get a good cash value, close to the actuarial value of the policy (after deducting the expenses).

It is unlikely that a third party will give a higher value on the policy.

June 29, 2007 10:35 AM
Anonymous said...

If you are interested to sell away your policy, please send me email to jason_goh68@yahoo.com.sg

June 29, 2007 9:40 PM

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