Many homeowners in the UK during the 80's and 90's purchased endowment policies. They were sometimes called mortgage endowment policies. These policies were a form of insurance and investment savings that would cover the final cost of the home mortgage when it came due. The policy holder would make monthly payments and these payments were to cover their mortgage and provide for some savings.
Despite intentions or promises, investments can vary in end value, and these policies did not come with a guarantee that they would pay out enough to repay the mortgage at the end of the policy term. What's occurring now is the endowments have a shortfall and cannot pay the owners mortgage payments. In some cases, endowment holders are reporting shortfalls of tens of thousands of pounds.
That has resulted in a lot of stress and disappointment for the policy holders. Many in a state of frustration are surrendering them to the issuing life companies for much less than their value. Life companies include Norwich Union, London Life, Scottish Widows, Prudential Life and many others.
Selling on the Secondary Market
Finance companies have appeared who help find buyers for these policies. Endowment policies can be traded, bought or sold on the open market. A few of the endowment policy trading firms have access to extensive numbers of potential buyers who are looking for the right type of policies to purchase. That means sellers can access buyers who are more interested in their particular policy and that results in a higher price.
Left to their own devices, endowment policy holders don't have access to the right services. Without a strong base of potential buyers, they're not likely going to receive the full value of their policy.
What is a Traded Endowment Policy?
Traded endowment policies or TEPs are policies which the original policyholder has sold and that includes the assignment of all future benefits. Endowment policies are long-term and fairly rigid in design. Many policy holders realized that the endowment policies do not meet their changing financial circumstances and goals. They can borrow against the value of the policy as it is considered a viable asset by banks and finance companies. They can also unload the endowment policy by selling them.
Only about a third of all endowment policies reach full term, (e.g., 25 years). Many are or were cancelled within a few years of their conception. That leaves about a third that may reach full term.
Traded Endowment Claims
Endowment policies were sold as a savings instrument that would help to cover long term home mortgages. Many didn't and won't and that has resulted in a lot of legal or mis-selling claims and the assurance companies who issued them. Financial services firms are offering to help with the process of policy holders selling their policies. To avoid scams and ripoffs in the UK, you should not sell your policy via any firm that does not adhere to the dictates of the Financial Services Authority's Mortgage Endowment Department.
There are numerous companies brokering or selling endowments and policyholders are recommended to ensure these companies are governed by the FSA in the UK.
In the UK, the government's Financial Services Authority has set out guidelines for managing endowment policy complaints and claims. The FSA's contact address is as follows: Mortgage Endowment Department, The Financial Services Authority, 25 The North Colonnade, Canary Wharf, London E14 5HS.
Gord Collins provides marketing services for Endowment Express, a leading UK company specializing in Selling Endowments, located in London, UK.
Article Source: http://EzineArticles.com/?expert=Gord_Collins
No comments:
Post a Comment