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What are traded life policies and traded endowment policies

Traded life policies (TLPs) and traded endowment policies (TEPs) are investment products that involve purchasing life insurance policies or endowment policies from the original policyholder, and then paying the policy premiums until the policy matures or the life insured passes away. These types of policies are commonly referred to as “second-hand” policies.

When a policyholder decides to liquidate their life policy or endowment policy, they can do so through an individual or company that wants to buy the policy for resale. The intermediary usually offers to buy the policy at a higher price than the surrender value offered by the insurer and then resells it to another investor. Only existing policies purchased from the original policyholders are involved in this process, and no new policies are created.

TLPs and TEPs are not regulated by the Monetary Authority of Singapore (MAS), which means that intermediaries and distributors of these policies are not licensed by MAS. Investors who buy TLPs and TEPs are obligated to pay the policy premiums until the policy matures or the life insured passes away. The maturity date of the investment may be uncertain, and investors cannot rely on laws administered by MAS to take action against any problems encountered during the investment process.

Investors should carefully read and understand all the terms and conditions of any contractual document before buying a TLP or TEP.  TLPs and TEPs have risks, including life extension, legal challenges, liquidity risk, credit risk, foreign exchange risk, and fraud risk. Investors should be aware of these risks before investing in TLPs or TEPs.

If you or someone you know is thinking of surrendering a life insurance policy, please don’t hesitate to contact us. We can provide you with a more lucrative solution compared to what the insurer is offering.

    Looking to sell your policy?

    If you, or anyone you know, is interested in surrendering their life insurance policy, please let us know. We can offer a more profitable solution than the insurer would provide.

    In conjunction with CapitaSafe, the leading independent resale insurance provider specialising in the acquisition of life and endowment insurance policies in Singapore via absolute assignment. An absolute assignment is the transfer of a life policy to another person for various reasons and is governed under Policies of Assurance Act (Chapter 392).

    Once the policy is assigned, the assignor (policy owner) loses all rights to benefit under the policy. The assignee will receive all future correspondence on the policy. All future benefits and/or payment will be payable to the assignee.

    The sale of life insurance policies in the secondary market is currently not regulated in Singapore.

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