Selling Endowment Mortgage

With the fall in the demand for endowment mortgages in the U.K. due to poor management of endowment policies and fall in the stock market, the policy holders started to seek alternatives for getting more profit from their existing policies. They realized that the amounts they will receive once the policies mature will not be anywhere near the promised amount to repay the mortgage loan. They had to look out for other payment options and wanted to get rid of the policies that no longer made any profit. Some of the policy holders surrendered their policies to the companies that sold them the policies; but that was also a loss as the surrender value was decided by the companies and was very low. This prompted many of the borrowers to sell their policies to third parties who promised an added value over the surrender value.

Selling endowment mortgages to buyers that offered more money soon became the order of the day. The endowment policies were exchanged for a lump sum payment, thus earning the name traded endowment policy or TEP. Many companies were ready to buy both ‘with profits’ policies and ‘unit linked’ policies by paying more than the surrender value to the policy holder. This trend led to the burgeoning of a second hand endowment policy buying and selling business. Several Traded Endowment Specialist companies came into being as the agencies for carrying out the transaction of policies from the policy holder to a company that bought these policies to keep them until they mature. Some buying companies also provided special offers for those policy holders who sold the second hand policies only through the Traded Endowment Specialists. Similarly, the Traded Endowment Specialists helped the policy sellers by guiding them to the right offer that can meet their requirements rather than ending up with more loss.

Selling endowment policies have some drawbacks also. When an endowment policy is sold, the life assurance policy linked to the endowment also disappears. The policy holder will have to look for another life assurance policy; getting a life insurance at an older age is costlier and this should be considered before selling an endowment policy. Once the policy holder decides to the sell the endowment policy to a third party, he can approach the company directly or a Traded Endowment Specialist and fill out a quotation form. The policy holder then receives the quotations for the offer price from the buying company. When the policy holder feels that the offer is really good, he can accept the offer and sell the policy.