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Have you heard of Traded Endowment Policies (TEPs)? You should read on with eagerness if you have not. I have posted several questions to Mr Dennis Ng, who owns TEP Pte Ltd that handles this investment product. This Q&A would be able to help you understand TEPs better and hope that they may fit your financial needs or investment portfolio perfectly.
1) Are TEPs whole life policies or investment linked policies?
Neither. TEPs are Traded Endowment Policies. They are basically UK Endowment Policies bought from the secondary market in U.K.
2) When one purchases a TEP and take over the ownership, will he/she enjoy the sum assured stated in the policy if death happens to him/her?
Nope, the insured remains the original person. You are the owner of the policy and enjoy the maturity value of the policy upon maturity.
3) Currently, only UK TEPs are available in Singapore, are there any other countries that offer as well?
I only trust UK TEPs because UK has very strong regulation and protection on Endowment policies. TEPs are highly regulated in UK to eliminate any risks of fraud. In the worst case scenario of the collapse of a UK Insurer, you as the investor is protected under UK Financial Services Compensation Scheme, which guarantee 90% of the Cash Value of the policy. Which means your maximum downside is only 10% of the Cash Value of the policy.
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Have you heard of Traded Endowment Policies (TEPs)? You should read on with eagerness if you have not. I have posted several questions to Mr Dennis Ng, who owns TEP Pte Ltd that handles this investment product. This Q&A would be able to help you understand TEPs better and hope that they may fit your financial needs or investment portfolio perfectly.
1) Are TEPs whole life policies or investment linked policies?
Neither. TEPs are Traded Endowment Policies. They are basically UK Endowment Policies bought from the secondary market in U.K.
2) When one purchases a TEP and take over the ownership, will he/she enjoy the sum assured stated in the policy if death happens to him/her?
Nope, the insured remains the original person. You are the owner of the policy and enjoy the maturity value of the policy upon maturity.
3) Currently, only UK TEPs are available in Singapore, are there any other countries that offer as well?
I only trust UK TEPs because UK has very strong regulation and protection on Endowment policies. TEPs are highly regulated in UK to eliminate any risks of fraud. In the worst case scenario of the collapse of a UK Insurer, you as the investor is protected under UK Financial Services Compensation Scheme, which guarantee 90% of the Cash Value of the policy. Which means your maximum downside is only 10% of the Cash Value of the policy.
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Have you heard of Traded Endowment Policies (TEPs)? You should read on with eagerness if you have not. I have posted several questions to Mr Dennis Ng, who owns TEP Pte Ltd that handles this investment product. This Q&A would be able to help you understand TEPs better and hope that they may fit your financial needs or investment portfolio perfectly.
1) Are TEPs whole life policies or investment linked policies?
Neither. TEPs are Traded Endowment Policies. They are basically UK Endowment Policies bought from the secondary market in U.K.
2) When one purchases a TEP and take over the ownership, will he/she enjoy the sum assured stated in the policy if death happens to him/her?
Nope, the insured remains the original person. You are the owner of the policy and enjoy the maturity value of the policy upon maturity.
3) Currently, only UK TEPs are available in Singapore, are there any other countries that offer as well?
I only trust UK TEPs because UK has very strong regulation and protection on Endowment policies. TEPs are highly regulated in UK to eliminate any risks of fraud. In the worst case scenario of the collapse of a UK Insurer, you as the investor is protected under UK Financial Services Compensation Scheme, which guarantee 90% of the Cash Value of the policy. Which means your maximum downside is only 10% of the Cash Value of the policy.
Your answer to question 2 that your gain depends on the maturity proceed means that you know when you will get and the return, am I right? In other words you buy at a deep discount.The discount determines the return.
Hi Ken, yes and no for your question. Yes, you will know exactly when you will get your money back. No, you would not know your exact return from the start, as it depends on the returns made by the company issuing the policy.
Hi Alvin, as the insured remains the same, what happens if the insured dies before maturity? And how do we monitor the insured life? Warmest rgds.
Hi Gomez, here is the reply from TEP:
In the event the insured dies before maturity, the investor (the new owner of the policy) will get the prevailing Cash Value Plus the Terminal Bonus, which might be about the same or slightly more than Maturity Value, the difference is not big.
Investors should treat this as an investment with a Fixed Maturity on Maturity Date. There is no monitoring of whether the insured continues to live after sale of the Endowment Policy and investors does not gain much even if the insured dies before maturity date.
UK Traded Endowment has been around in UK for over 35 years, it is highly regulated and in the current uncertain environment, offers the possibility of a steady annual returns of 5% to 8% with a solid 90% downside protection by the UK Financial Services Compensation Scheme. On the other hand, Singapore Endowment policies without the same downside protection only gives about 3% annual returns.
UK Sterling Pounds is also currently trading at 20 year low level against Singapore Dollar. With the Olympics to be held in London in year 2012, the next few years should see some positive impact of the impending Olympics game. The higher returns also provide a buffer against any possible downside risks from adverse movement in exchange rate.