Traded Endowment Policies
Hit by the Recent Financial Crisis?
If there is a Safe and Stable Investment
that offers 4%-8% annual returns with
70%-90% Capital Gaurantee
by respectable Insurance Companies,
would you be interested?
If you are…
a low risk investor…
“I am a low risk investor and looking for a traditional low-risk product with high % of capital guarantee…preferably from highly established companies which can provide decent growth with a high degree of certainty.”
looking to balance and diversify your portfolio…
“I have invested in other investment products and is looking for an established, low risk and yet offer attractive returns product to diversify and balance my investment portfolio.”
looking to save for our child’s education…
“I am looking for a saving plan for my child’s education, preferably with attributes like: low risk; growth with high degree of certainty; fixed maturity date; resilient to market timing; high % of capital guarantees”
looking for a low risk Annuity plan…
“I want to invest in a low risk annuity plan. A plan that has high % of capital guarantees, fixed maturity date and is more resilient to market conditions than other products.”
looking for long term retirement plan…
“I want to save money for my retirement. I want to consider an investment with high % of capital guarantees, pre-determined maturity date and attractive returns.”
looking to save for our wedding and a world tour…
“I would like to save for our wedding in a couple of years and go for a world tour in 4 years. It should have stable returns, low volatility and a time frame that suit my needs.”
The answer to your needs will be UK
Traded Endowment Policies (TEP)
What is Traded Endowment Policies (TEP)?
A traded endowment policy is commonly known as a ‘second-hand’ endowment policy. It is an endowment policy that has been sold by the original policy owner to an investor other than the insurer itself. TEPs are often participating endowment policies.
Is it SAFE investing in UK TEPs?
Traded Endowments are even “safer” than S$ Bank Deposits. Singapore only has maximum Deposit Insurance up to S$20,000 per bank. Even if you have S$1 million with a bank, you only get back S$20,000 if the bank goes into trouble. TEPs are STRICTLY Regulated in UK with all its requisite protection and safeguards, including a Financial Compensation Scheme that protects over 90% of the Cash Value of the Policy even in the event of the WORST Case Scenario of the collapse of the UK Insurer.
Backed by Financial Services Compensation Scheme
The Financial Services Compensation Scheme (FSCS) is the UK’s statutory fund of last resort for customers of authorised financial services firms. This means that FSCS can pay compensation if a firm is unable, or likely to be unable, to pay claims against it. FSCS is an independent body, set up under the Financial Services and Markets Act 2000 (FSMA).
The level of compensation is 90% of the cash value of the endowment policy!
The actual level of compensation you receive will depend on the basis of your claim. FSCS can only pay compensation for financial loss. Compensation limits are per person (per firm and type of claim).
Regulated by Financial Service Authority
TEP is also one of the most transparent investments in the market. Monitored under stringent UK Financial Service Authority (FSA) regulations, the following information will be provided to all investors:
(a)name and financial rating of the insurance company issuing the policy
(b) details of the original policy owner
(c) the maturity date and term of the endowment policy
(d) the sum assured, attaching bonus and surrender value of the policy
(e) the total investment amount, including future premium payable
Furthermore, upon assignment, the insurance company will contact you (the investor) directly to confirm ownership, announce yearly bonus and arrange for paying you (the investor) directly when the policy matures.
Benefits of Investing in TEP!
Participate during the period of high returns
If you can invest in a 30-year Endowment policy on the 22nd year, with remaining 8 years to maturity, you are investing in a policy that has been in force for 22 years with cash value built up over the years; you are effectively buying priceless investment time. You have just managed to skip the initial years of an endowment policy and invest directly into an endowment policy which has surpassed break-even point and derive the maximum benefits at the tail end of the policies.
The yearly bonuses declared by the insurance company will provide steady growth for the remaining term of your policy; while at maturity, you will receive a final maturity (terminal) bonus that is usually substantially larger than the annual bonuses.
When you invest in Traded Endowment Policies (TEPs), you are actually “buying time” as you’re buying over existing with-profits endowment policies which were sold by the original policyholders before the maturity date, for reasons that may include debt clearance, re-mortgaging, cash requirements, and more.
Instead of waiting 30 years for an endowment policy to mature, you can choose to invest in TEPs with as short as 4 years to maturity!
No yearly management & service fee
Once the policy has been legally assigned to you, you become the new owner of the policy. All bonuses declared by the insurance company go directly to you. Unlike Unit Trust/Mutual Funds, there is no yearly management or service fee to marginalise your returns.
Flexible time frame and no tie-in period
TEPs are very flexible. Policies can be selected with a wide range of maturity dates from as short as 4 years to 15 years to suit your specific requirements. Investors are not tied-in as policies can normally be re-traded at any time.
Discounted policies
Many TEPs have been in force for years, some exceeding 20 years. As such, you don’t have to pay hefty commission and administration costs, which come with setting up an endowment policy from scratch, thus leaving you to buy policies at a discount to their underlying value.
With a high capital guarantee, low risk and great returns, it is not a surprise that Traded Endowment Policies (TEPs) have been popular with investors in England and Europe. It is now available in Singapore for you to invest in. MAS allowed the distribution of TEP to retail investors since 2004.
RARE OPPORTUNITY!!!
Why You Should Invest in TEP NOW!!!
#1 Limited downside. Sterling pounds is trading at the lowest level against S$ in over 15 years. Of course, no one can guarantee that this is the lowest level it can get, but the chances of the exchange rate going higher in 5 years’ time is more likely than it going lower.
#2 Promised bonus rates are likely to be delivered. Most of the UK Insurers have already cut bonus on their Endowment policies. What it means is that the chance that UK Insurers might cut bonus further is low. In other words, the chance that UK Insurer can deliver the returns based on current Low bonus rates is very, very high.
#3 A Safe Place in the midst of Financial Uncertainty. In recent months, many financial institutions have collapsed. The unique thing about UK Traded Endowment is the Statutory Guarantee provided by the Financial Services Compensation Scheme. Even in the worst case scenario should the UK Insurer collapses, you still get back 90% of the Cash Value of the Endowment policy. I cannot think of any other investment that offers such a high level of Protection and Guarantee.
#4 Good time to buy low. Because of weak market conditions, it is possible to invest into UK Traded Endowment policies at a Low price now. Low price is bad for the sellers, but it is really good news for investors, who are buying the UK Traded Endowment policies.
With a high capital guarantee, low risk and great returns, it is not a surprise that Traded Endowment Policies (TEPs) have been popular with investors in England and Europe. It is now available in Singapore for you to invest in (minimum S$20,000, with up to 3 names for a joint investment). Fill in your particulars in the fields below and an experienced and knowledgeable consultant will serve you at the earliest opportunity.
{ 20 comments… read them below or add one }
may i know, minimum holding period for 20k investment?
may i know, minimum holding period for 20k investment?
you can choose from 2 to 15 years
you can choose from 2 to 15 years
what are the risks involved?
what are the risks involved?
Correction to previous comment. Min holding period is 4 years.
The main risk is currency risk. You will be exposed to the exchange rate fluctuations between UK pounds to Sing dollar. Currently, the FSCS is insuring 90% of the capital. The risk is that the British may change the policy and capital protection may no longer be in effect.
Correction to previous comment. Min holding period is 4 years.
The main risk is currency risk. You will be exposed to the exchange rate fluctuations between UK pounds to Sing dollar. Currently, the FSCS is insuring 90% of the capital. The risk is that the British may change the policy and capital protection may no longer be in effect.
You say these investments are safe. Yet the Protected Asset TEP Fund plc marked its value down by a third after the world financial crisis. I invested at GBP1.80 and two years later the price is only GBP1.35….. Wat is the difference between investign in this and individual units?
You say these investments are safe. Yet the Protected Asset TEP Fund plc marked its value down by a third after the world financial crisis. I invested at GBP1.80 and two years later the price is only GBP1.35….. Wat is the difference between investign in this and individual units?
Hi Janet, all assets plunged during the financial crisis. Everybody is cashing out, fear is everywhere and that is why TEP would also be affected. Since nobody was sure whether the CDO and CDS would spread to TEP. But it proved its stability and there was no threat to this financial instrument. Just that the pounds devalued while Sing dollar strengthened after the crisis. The other way to look at it is that the pounds is low now, isn’t it about buying low and selling high? Investment is about timing. When the market is good, everybody wants to be part of it. Do not buy anything when it becomes too comfortable.
Hi Janet, all assets plunged during the financial crisis. Everybody is cashing out, fear is everywhere and that is why TEP would also be affected. Since nobody was sure whether the CDO and CDS would spread to TEP. But it proved its stability and there was no threat to this financial instrument. Just that the pounds devalued while Sing dollar strengthened after the crisis. The other way to look at it is that the pounds is low now, isn’t it about buying low and selling high? Investment is about timing. When the market is good, everybody wants to be part of it. Do not buy anything when it becomes too comfortable.
What has also happened with the Protected Asset Fund is that a 9% penalty has been instituted on all redemptions since April as there were (so they say) an excessive amount so if, like us, you were invested in Teps 2 for which you had to wait for 5 years to redeem without penalty you now have to incur this further very high charge. We are so worried that we are thinking of cashing in now and taking the knock in case things get worse. What do you think? Is this fund safe? We have been invested for over 5 years and our money is worth infinitely less than it was then – what a joke!
Our perception is that we the clients are expected to take the knocks while everyone else gets rich on commissions and bonuses. Interested to hear other perspectives.
What has also happened with the Protected Asset Fund is that a 9% penalty has been instituted on all redemptions since April as there were (so they say) an excessive amount so if, like us, you were invested in Teps 2 for which you had to wait for 5 years to redeem without penalty you now have to incur this further very high charge. We are so worried that we are thinking of cashing in now and taking the knock in case things get worse. What do you think? Is this fund safe? We have been invested for over 5 years and our money is worth infinitely less than it was then – what a joke!
Our perception is that we the clients are expected to take the knocks while everyone else gets rich on commissions and bonuses. Interested to hear other perspectives.
Firstly, I am not a fan of funds and it is quite irresponsible for the Fund to charge additional 9% for redemption. In the first place, why is there a concern about this Fund that many people are cashing out? Was this part of the clauses stated upfront before you invested? I am not aware of the background so I cannot give much opinions on it. Maybe you can elaborate more?
Firstly, I am not a fan of funds and it is quite irresponsible for the Fund to charge additional 9% for redemption. In the first place, why is there a concern about this Fund that many people are cashing out? Was this part of the clauses stated upfront before you invested? I am not aware of the background so I cannot give much opinions on it. Maybe you can elaborate more?
I would like tgo learn more
No problem Francis, a staff will contact you soon and explain the product to you.
Hi, I’m interested in this. May I know the minimum to invested and the shortest duration. Then how much % of return do i get per year?
Thanks
Come across this FAQ from TanKimLian.
http://tankinlian.blogspot.com/2007/06/traded-endowment-policies.html
Well, I won’t invest to the product I don’t undestand.