Further information about selling endowments

When selling endowments, the seller has to be aware that they will lose the benefit of the life assurance contained within the endowments, and replacement life cover should be considered. A link on the right hand menu will help you. Selling endowments is now quite commonplace in the uk, and the whole process is technically known as a trading in endowments. An increase in the number of people selling endowments has taken place since “endowment shortfall red letter” warnings have been issued by the endowment life offices, and more policy holders are now selling endowments through this web, and receiving offers from private buyers or institutions that are over and above the surrender values being offered by the originating life offices. A traded endowment policy, or “TEP”, is a with-profits endowment policy that has been sold by the original policyholder to another investor before the end of the endowments agreed term. These policies are legally assigned to the new owner who continues to pay the premiums. They are also known as ‘second hand endowments’.

In many cases selling endowments on the traded endowment market, can return more money than compared to that offered by the life assurance company. The difference can be up to 35% more, but the age of the endowments and the life company that issued them play a big part in determining the endowments second hand value. Selling endowments must now be one of the options pointed out to you, if you contact the original endowment company with a view to surrendering the policy. This has not always been the case, but has been made law by the Financial Services Authority (see the 2 links above for more information on this). As a result the number of endowment policy holders now selling endowments has increased. The information on this selling endowments web site is intended as “information only” and should not be taken as “advice”.

If you are unsure about what to do about your endowments, you should consider taking advice from an independent financial adviser who is regulated by the Financial Services Authority. Good luck with selling your endowments.