The TEP (Traded Endowment Policy) Market:
Buying and Selling

Advice About the TEP Market | Advantages and Disadvantages

Not all policy holders have been happy with their endowments, thus opening the market for TEPs or Traded Endowment Policies. If you have a endowment policy you need to trade, here is some general information you need to know about the market:

• There are different reasons why people sell their policies. While a number of TEPs are on the market because their owners are not optimistic anymore about their projected income, most policies are being sold because the policy holders want to switch mortgages. Other TEPs are also sold because of divorce. Still, many TEPs are on the market because their owners cannot keep up with payments, or they need to raise capital to pay other loans.
• Should you opt to sell because of an anticipated shortfall, find out if you’re entitled to some form of compensation. If you manage to sell your policy and then find out later that you could have recovered some of your investment, it will be too late by then to do anything about it.
• Know the difference between traded and surrendered endowments. Traded endowments are offered on the open market to any interested buyer. Surrendered endowments are bought back by the provider, usually in cases of emergencies. If you are selling your policy and want the best deal possible, traded endowments are your best option since competing companies usually try to buy traded endowments that become available on the market.

> Tips for Selling Your Endowment:

• First, consult an IFA (Independent Financial Advisor) to help you with sorting out the details of putting your policy on the market.
• Check the Internet for instant online quotes. A basic search query should turn up enough results for you to work through initially. Take note of the terms and conditions offered and know all your options before settling on anything right away.
• Besides seeking independent advice, also make sure to contact the company that originally sold you the endowment you’re selling. It may turn out that the surrender value of your policy is actually higher than what you’d get for selling it to a third party. If this isn’t the case, you can still benefit from getting all the advice and information that you can from the company to help you sell your endowment. Should it happen that they don’t cooperate, you can report them to the Ombudsman: it is the obligation of the company that sold you the endowment to provide assistance whether you decide to sell or surrender your policy.