Endowment Shortfall Problems

The endowment shortfall is an issue that has effected hundreds of thousands of people across the UK. A conventional endowment policy is a life insurance contract which will pay a predetermined lump sum following the death of the life insured. An endowment policy is also an investment policy as part of the premium is paid into one of the insurer's with profit funds. As the policy progresses a value is accumulated and is supposed to meet a target at the end of the policy, upon assumed growth rates. At this point it matures and pays out a final valuation to the consumer.
The sum insured is split into two elements, the guaranteed sum assured which is an amount that should be guaranteed to be paid out at the end of the policy and the mortgage sum assured which is the guaranteed sum assured combined with the total life cover in place.
Bonuses are paid each year called reversionary bonuses and these accumulate and are paid at maturity. The insurer will announce at what rates these bonuses are applied at each year. There is also another possible bonus applied to the policy upon a claim or at maturity which is called the terminal bonus. Again these rates are announced by the insurer each year and are not guaranteed to be anything at all.
As previously mentioned the policy is an investment and has a surrender value which is made up of the bonuses, premiums paid and how long the policy has been in force.
It is possible that when upon any claim or early surrender that the policy can be penalised due to poor market conditions. This means that the surrender value will have a Market Value Reduction or Adjustment made to it. This is applied to protect other policies that remain invested in the with profits fund that these policies are invested in.
The endowment shortfall has been a result of the poor performance of the insurers' with profits funds. Bonuses have also been low or non existent and whereby upon sale the policies were made out to hit or even exceed at target at the end of the policy they have been falling well short.
The main concern is that the possibility that there could be a shortfall was never made clear at the beginning of the policy by which ever company or agent that was responsible for selling the product.
Throughout the term a consumer can ask for a projection from that point until the policy is due to mature, this is called an estimated maturity value. This will show upon 3 different assumed growth rates what the policy will likely pay out at maturity. This can show a shortfall from early on and people that have been actively watching their policy have been able to take action but unfortunately many people don't find out until a lot later or even at the end and this can be a very problematic surprise!
Due to the backlash that has come from the endowment shortfall problem insurers have seen consumers complain in vast numbers as have financial advisers and any other people or companies responsible for selling these contracts. Companies have been set up to deal with mis-selling complaints on behalf of consumers and also there are a range of market maker companies who are willing to buy endowment policies from consumers for a competitive price so they can keep the policies as collective short term investments. This is a very popular choice for people that are not willing to see the endowment policy through to maturity only to be faced with a huge endowment shortfall. It is at the very least a way of cutting their losses.

Steven D Wright worked for many years in the offices of one of the UK's largest insurance companies. His websites on Life Insurance Questions and Life Term Insurance Policy explain in straight forward language the intricacies of the life insurance world.

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What is Endowment Insurance?

In Life Insurance, by Dan McGill, 1967 Edition, we read, "from the standpoint of structure, it may be said that an endowment policy is a combination of pure or level term insurance and a pure endowment. The same description may be applied to a whole life policy, which is simply a combination of term insurance for a period extending to age one hundred and a pure endowment for the same term."
Barron's Dictionary of Insurance Terms by Harry W. Rubin, third edition, 1991 defines PURE ENDOWMENT as "Life insurance policy under which its face value is payable only if the insured survives to the end of the stated endowment period."
The Handbook of Insurance by Clyde J. Crobough, 1931, speaks of the attributes of endowment insurance: "Some of the special merits of the endowment policy may be summarized briefly: 1. Is a method of compulsory saving. 2. Combines protection and investment. 3. Helps to create funds for special objectives which the policyholder may use."
Endowment life insurance policies have been rarely used in the last ten years. Prior to this, they were popular as a savings mechanism at many life insurance companies. Today, annuities and or universal life have replaced endowments as a popular concept. However currently, endowment life insurance policies seem to be making a comeback. More and more insurers have been offering these policies to satisfy various life insurance and income tax needs. The advantage of an endowment life insurance policy over a tax-deferred annuity is that upon passing to the beneficiary, income tax on the interest earned will have to be paid on the annuity but not on endowment life insurance policy.
For further information, please go to
http://www.insurance-endowment.com/

Dale M. Krause is a National Medicaid Crisis Planning Specialist with Krause Financial Services, Inc. Mr. Krause’s educational credentials include a B.S. degree from the University of Wisconsin-Stevens Point, Wisconsin; a J.D. degree from Thomas Cooley Law School, of Lansing, Michigan; and, an LL.M. in Taxation from DePaul College of Law, of Chicago, Illinois.
Mr. Krause is also a member of the Wisconsin and Michigan Bars, National Academy of Elder Law Attorneys, Inc., Coalition of Wisconsin Aging Groups, Institute of Elder Planning Studies, International Association For Financial Planning, The Financial Planning Association, Society of Financial Service Professionals, Fidelity Advisor Council, and is a licensed insurance agent and stockbroker. Mr. Krause is a regular speaker at continuing legal education forums throughout the United States. Dale M. Krause, J.D., LL.M. KRAUSE FINANCIAL SERVICES 1120 Red Wing Trail, De Pere, WI 54115 Telephone: (866) 605-7437 Fax: (866) 605-7438 E-mail: dalekrause@insurance-endowment.com Website: [http://www.insurance-endowment.com]

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Endowment Policy - Is Endowment Policy Indeed A Financial Protection?

Endowment policy is an insurance plan that is structured to pay a lump sum once the policy reaches maturity, thus it is financial protection for policy holder and the relatives of his. The payment of the policy may vary depending on the term of the policy itself in that if the term vary in terms of years to maturity you will very well be certain the payment will differ. Now the issue with endowment policy is that the coverage may also restrict payout based on the cause of death, illness or accidents that are not known as at the policy is entered into. There are different formats that determine the payout of the policy for cashing in on the policy like considering the time the coverage has been in force as well as the amount of cash that has been paid into the policy to the date payment is effected or requested.
The essence of any endowment policy like I said is to provide financial protection to the beneficiary once the contract reaches maturity. The pay is usually sum assured which is paid at the maturity of the policy and depending on the performance of the policy, there might be some additional benefit provided the policy performed well. In essence, endowment policy really makes you an assured man of better future in case anything contrary happens. Now endowment life policy is an insurance plan as well which includes provisions for early payout should the assured party die before the contract lapses. There are some certain conditions that might prevent the insured party from being deprived of his benefit like in the case of certain death that are disallowed, such insured party will be prevented a payout on the policy. Take for example, the insured commits suicide or due to medical condition that was not disclosed during the signing of the policy, if it is proven that the beneficiary is responsible for the death of the insured, then he will not be paid on the proceed of the policy. It will be wise to protect yourself financially by going to endowment policy center for detailed tips there

kaz rel is an endowment life insurance policy enthusiast that enjoys sharing quality contents with others. He has many articles at his blog at endowment life policy HERE

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Endowment Insurance Explained

Similar to Term life insurance, Endowment insurance is also designed to cover the insured person for a specific period of time, however, that's what the similarities end. Endowment is more similar to Whole Life insurance except that an Endowment policy matures faster than Whole Life does.
An Endowment policy lasts for a specific period of time, for example, a 20 Year Endowment or an Endowment at 60 years. All that this means is that the policy will be paid off in that time frame. In a 20-year Endowment all of your premiums would be paid off in 20 years. In an endowment at 60 you only pay life insurance premiums until you're 60 years old, at which time your policy would be paid up in full. This makes Endowment much more expensive than regular Whole life insurance because you're taking an entire lifetime of premiums and compacting them into a short period of time. The shorter the period, the higher your premiums will be.
Endowment policies build cash value much faster than Whole Life policies do because you're paying your premiums out in a shorter period of time. During the period of coverage the insurance company will pay the beneficiary of the policy the face value in the event of the death of the person insured. If that person does not die during the specified period of the Endowment, then the owner of the policy will receive the face value when the policy reaches maturity. The cash value and face value will both equal the same amount when the policy matures.
The main purpose of owning an Endowment policy is so you can acquire a rapid buildup of funds over a short period of time. These funds can be used for any purpose needed. Endowment policies are not nearly as popular as they used to be.

Joe Stewart Is A Webmaster And Former Life And Health Insurance Agent. He's Made Understanding Life Insurance Easy For Others. You Can Get Free Life Insurance Quotes At His Website TheLifeInsuranceGuys.com or by clicking on Endowment Life Insurance

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An Endowment Life Insurance Policy Is a Term Life Policy With a Cash Back Feature

When you are looking for a good life insurance plan and whole life is not an option you might consider an endowment life insurance policy. An endowment life insurance policy is a term life policy where you are insured for a set period of time. If you should die during the period you are insured, your beneficiaries will get the proceeds. However, when you are searching for term life policies you will find that this type of insurance policy has and added benefit. It accumulates a cash payout over the years.
Therefore, if you do not die within the time you are insured you will be able to take out the money on its maturity date. Traditionally these types of policies have been taken out to provide funds for college or anything that a family may want money for at a future date. How much the cash value builds at any given time depends largely on how well the insurance company is doing with their investments. Endowments also provide cash surrender value if the insured cashes out before the maturity date. Though it is not recommended to use the endowment in this way, it can cushion a disastrous financial setback.
There are different types of endowments with different levels of flexibility for the insured. Full endowment policies will provide a cash surrender value equal to the death benefit. A unit-linked endowment often allows the insured to decide which funds their policy will invest in and how much will be invested. Traded endowments are endowments that have been sold to a new insured when the former policyholder has surrendered the policy; yet, there is still potential for growth and cash value accumulating within the policy. Finally, low-cost endowments are usually purchased to pay off the interest portions of mortgages, if the insured does not die beforehand.
Generally speaking when you compare term life insurance rates you are going to find that this type of term insurance is more expensive. The reason of course is because the typical term life insurance policy does not have an accumulated cash value. Term insurance pays the death benefit if the insured dies within the term of the policy. In the end, when you compare term life insurance rates you must decide if you want the most affordable coverage or coverage that will offer some additional cash back, but will cost a little extra per month.

The author is Pete Loren who is working in magazines. The article is about endowment life insurance policy and compare term life insurance rates.

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Endowment Life Insurance

There are many different types of insurance policies that are available, but some people choose endowment life insurance because of some of the benefits that go along with it. This type of insurance policy pays out upon maturity or upon the early death of the individual that holds the policy. You can choose a number of different terms for this type of insurance policy, generally 10, 20 or 30 years. There may also be age limitations as to when the policy will mature.
One other option that you may have available to you is that there are some endowment life insurance policies that will pay out upon the policy holder having a critical illness. This can benefit everyone involved, as it is often a time of increased financial stress and you may need the money that is in the policy in order to pay for medical expenses as well as for a loss of income. It would be a good idea for you to check with your insurance agent if your policy will pay out should you happen to become critically ill.
One of the benefits of choosing this type of insurance policy is the fact that, regardless of how much you have paid in, the beneficiaries are going to receive a settlement according to the terms of the policy. If you should happen to take out a 30 year policy and something should happen to you after just a few years, the beneficiaries are going to receive the same amount of pay out as they would if it had matured at 30 years. Many people like the peace of mind that they get from knowing that their loved ones will be taking care of while at the same time, they are investing in their own future.
Of course, this type of policy is not going to be for everyone so it will be a good idea for you to examine all of your options in advance. This would not only be true of checking out other types of life insurance but it is also true with getting various quotes from different insurance companies. Along with that, you would want to check into the tax benefits of these different types of insurance policies as there are differences in that area as well. This can really help you to choose something that will not only benefit you now but will benefit everyone involved in the future.

Visit http://www.annuitycampus.com for more Annuity and Life Insurance Tips and Tricks.
Call Robert Eldridge directly at 800-643-7544.
Robert Eldridge holds over a decade of experience as a multiline agent in multiple states and currently serves on the membership council of the National Association of Insurance and Financial Advisors

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How to trade in your endowment

If it looks as though your policy is not on track to
repay the mortgage, one option is to throw in the towel and sell it on
the 'second-hand' market. Richard Evans reports

If you have just received a "traffic light" letter from your
endowment provider warning that your policy is no longer on track to
repay the mortgage, your first instinct is probably to fire off a
mis-selling complaint.


Many people also pick up the phone and call a company that
deals in traded endowments. Many of these firms claim policyholders can
get up to 30 per cent more money from selling their policies to a third
party, rather than simply surrendering them to an insurance company. But
in fact, only a very few people will achieve this kind of mark-up.


In order to have any chance of selling on your endowment
policy it has to have been running for a third of its term - or a
minimum of five years - and have a surrender value of at least £1,000.
It also has to be a with-profits endowment. Some insurers, such as
Allied Dunbar, sold "unit-linked" plans but there is no second-hand
market for these policies.


But even if your policy meets these criteria, you may still
struggle to find a buyer. Only policies offered by certain insurers tend
to command a premium. Alan Lewis, who runs Lewkay Financial Services, a
Billericay-based independent financial adviser that specialises in
traded endowments, says the market can be unpredictable, but that it is
usually possible to obtain good valuations on policies from Royal
London, Britannic, General Accident, Co-operative Insurance, Liverpool
Victoria and Clerical Medical.



If you are unlucky enough to have an endowment with Eagle
Star, Britannia Life, Equitable Life, Life Association of Scotland,
Police Mutual, Provincial Life, Scottish Equitable, Scottish Life,
Scottish Provident and Winchester Life then you are unlikely to be able
to sell it.
This is not surprising, given that some of these companies
have inflicted the most punitive bonus cuts and the outlook for many of
these with-profits funds remains pretty bleak.
If you cannot sell your policy you have three options:
accept the surrender value offered by their insurer, keep paying the
premiums and run the risk of seeing little return on this money, or make
the policy "paid-up". This third option simply means you keep the
policy but stop making contributions - in some cases, though, this will
reduce the entitlement to the terminal bonus that is paid when the
policy matures.
But for those fortunate enough to be able to consider
trading their endowment, how should they go about it? If you contact The
Association of Policy Market Makers, an industry trade body, they will
be able to give you the names of a number of market makers.
Always call more than one market maker, as prices can vary
enormously. Although one may not want to buy your policy, another may be
willing to offer a significant premium. Remember, you need to have
details of the latest annual bonus and an up-to-date surrender valuation
from your endowment provider to hand when you ask for a quotation.
Lewis says that the amount buyers will offer in the open
market is unpredictable. He also warns that some endowment traders make
"indicative offers" rather than firm cash offers for your policy. The
indicative offers are not binding and you may ultimately be offered a
lot less, he says. So always double-check the price before selling the
policy.
Why do third parties offer more money for your endowment
than the company you bought it from? Simply because these investors are
hoping to cash in on future terminal bonuses.
As endowments are with-profits investments, the insurance
company adds bonuses every year if it thinks the performance of the
underlying investments - largely shares - justifies it. Provided these
policies are held to maturity the bonuses cannot be withdrawn,
regardless of stock market performance.
Because of this, insurers tend to err on the side of caution
when awarding annual bonus payments. Increasingly, a far greater
proportion of the total returns on an endowment comes from the terminal
bonus - the payment made on maturity. This terminal bonus reflects the
actual returns of the with-profits fund over the life of the policy,
over and above the bonuses that have been paid to date.
Of course, anyone buying a second-hand endowment gains the
full terminal bonus despite only paying premiums for a fraction of the
time that the policy has been running. Proportionately, they stand to
gain a far higher return on their money. Given the current investment
climate, terminal bonuses on many funds look set to be far lower than
they have been in recent years. This explains in part why buyers have
become far more choosy about which endowments they are prepared to buy
second-hand: they only want policies that are backed by the strongest
with-profits funds.
It is unusual for mortgage lenders to object to your selling
an endowment linked to an interest-only home loan. However, Lewis says
some lenders may insist that you switch to a repayment mortgage or that
the proceeds are paid directly to them to reduce the outstanding debt.
Don't forget that selling your policy means that you forfeit
its life cover, so you may want to arrange new life insurance. Remember
too that if you decide to sell on or surrender your policy, you can
still pursue a mis-selling claim.

The Association of Policy Market Makers can be contacted on 0845 011 9394, or via their website.

Endowment Selling Answers

Why sell an endowment policy?

Many policyholders want to sell their endowment because it has performed badly or they want to raise money now. Often the surrender value, obtained if the policy is surrendered to the insurance company, will be too low. An alternative is to sell your endowment to a company, or broker, that buys secondhand endowment policies.
It is important to obtain a number of quotes before selling an endowment policy so that you can obtain the best price.

Which endowment policies can be sold?

There are different types of endowment policies and not all can be sold onto the secondhand or Tep market. If you have a type of unit linked endowment you will not be able to sell the policy, although other options may be available.
If you have a with profits endowment then you are likely to find a number of companies will offer to buy your policy. The quotes you receive should be significantly greater than if you surrendered the endowment to the insurance company. They could be as much as 10-15 percent more in some cases.
It is important to note that you will probably only be able to sell an endowment if it has been running long enough. For example, members of the APPM can only buy an endowment if it has been running for one third of its full term or five years, whichever is longer. You are also unlikely to be able to sell an endowment policy with surrender value of less than £3000, although the APPM says that "approximately £1,000 minimum surrender value is required"

How quickly will I get paid?

After accepting an offer for your endowment and returning the necessary paperwork, payment could be received in as little as four weeks, although it can often take longer.

Should I sell my endowment policy?

Only the policyholder can decide if its worth selling their endowment and should consult a financial advisor about their options.
Alternatives to selling an endowment include making the policy "paid up". This means that the policyholder stops paying the premiums and accepts they will receive a smaller amount when the policy matures. It is also possible to take out a loan against the value of the policy.
Remember that you lose the life insurance cover if you make the policy paid up or surrender or sell the endowment.

How Selling Endowments Can Help Your Financial Future

Selling an endowment is something any non profit making institution no matter the size or type, can achieve. They can ensure the future of the institution with a financial Endowment.

Financial endowments really are just acquired funds that are somewhat restricted, where interest spending is the only permitted option of spending the money received from an endowment.

Generally, only a small percentage of the endowment earnings and interest, usually 5% are spent yearly to guarantee that the main funds develop and grow in time.

Some institutions and Professional money managers develop the practices of overseeing their endowment moneys, usually investing the funds in other areas, especially in the stock market and other investment avenues.

The main people who benefit from Selling Endowments are schools and universities. These endowments allow them acquire up large amounts of money over the years. These universities usually reinvest part of the interest received each year, allowing the main investment to grow in size.

If you own an endowment, you basically have four options. You can sell or surrender your endowment, or keep it while deciding to continue paying for it or not

It is very important that you don't move rashly. Surrendering or Selling Endowments early or stopping repayments could leave you out of pocket so it's crucial that you calculate the sums very carefully.

If you think it is necessary, you could see if you can get financial advice from an independent professional or person. I cannot stress enough on the fact that is important when deciding whether to surrender, keep or sell endowments. Please make sure that you have gone through all the potential losses and benefits you could get from these options.

Clement Faria is just another Web / Multimedia Developer who writes as a hobby. Check out more about him at his site http://www.clementfaria.com/blog/

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Sell Endowment Policy - Should I Sell My Endowment Policy

I have found several advertisements in national papers recently from companies offering to sell my endowment policy. However, which is the best option to get the best return?

It is estimated that over 4 million with-profits endowment policies were sold by insurance companies in the eighties and nineties. These policies were designed to last for up to 25 years and increase in value each year as a bonus is added to the amount of money that you paid in every month plus an estimated big bonus at the end of the term. Most of these policies were estimated on annual bonuses accruing at up to 9%, however in reality, with the fall in interest rates over the last 10 years, most policies are currently returning less than 1% per year.

These with-profits endowment policies were sold as a means to repay an interest only mortgage at the end of the mortgage period. Industry experts now predict that 9 out of 10 policies will not reach their target figure to repay the mortgage. With nearly 4 million policy holders having been informed by their insurance companies of the potential endowment shortfall, there is a big market out there for Traded Endowment Policies.

Many people have now made other provisions for paying off there mortgage, like converting them to a repayment type where the monthly payments include both interest and capital. So what do you do with your old policy?

Selling your endowment policy may give you a better return than just to cash in or surrender your endowment policy. However you may want to replace the life insurance component with a more suitable product.

I decided to sell my endowment policy and I accepted an offer that was 10% higher than the surrender value so I was happy. If you think it is time to sell your endowment policy then make sure that you check out all your options, starting with contacting your insurance company to get a valuation. They will advise you on any alternative options that they can offer to you as well. Read more about what investigations I did before selling my endowment policy at http://SellEndowmentPolicyReview.com

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Selling Endowment Policies The Easy Way

Even if you are expert when it comes to selling endowment policies, chances are that everyone is going to want a helping hand when they set out to do this. For this reason many people enlist the help of a company that specializes in selling endowment policies. Whether it's because you simply want to ensure that you get the best possible price for your policy or if it's because you don't know the first thing about them, you are going to feel more secure knowing that you have professionals helping you out.

One of the biggest advantages of using a company that specializes in selling endowment policies is the fact that they have inside knowledge of the market that you would never be able to attain. This means that they will be able to get the best possible price for you policy and will also be using good, reputable companies.

If you are a very busy person then it is unlikely that you are going to have time to phone around various different companies in order to try and find out the best price for your policy. Therefore using a company that specializes in endowment policies means that they do all the hard work for you and all you have to do is sit back and wait for the quote they give you.

Few people realize that there are hidden costs involved in selling endowment policies. However, any good company that you use to do this for you should include all the legal and administration costs of selling your policy. This means that you don't have to worry about any hidden costs or surprise bills when you have sold your policy.

When looking for companies that sell endowment policies it is important to use one that is authorized and regulated by the Financial Services Authority. If you do this you can guarantee that they will be governed by the highest standards of ethics and business practice which means that you are going to get a good service.

All members of staff who work for these companies will have had a lot of experience when it comes to selling endowment policies. They are bound to know more than you regarding the topic as this is their job and therefore they will be able to offer you good advice and help you to get the most out of selling your policy when it comes to doing so.

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Quick Cash by Selling Your Endowment Policy

If you are looking for quick cash, have you ever thought of selling your endowment policy? Yes, selling your endowment has the ability to make you cash in right away. However, this does not mean that you have to settle for the insignificant amount your insurance form is offering. There is a better way to go about this.

You will never know when you will have the need for immediate cash. There is no way to foretell what the future may hold. There will be situations when you will need cash right away. However, there are also times when there is not enough cash available.

The situations may vary. You may need it for emergencies. There may be an immediate need. You might need it to settle loan payments. You might need money to avoid foreclosure. You may need it for an opportunity that you cannot pass you by. For whatever the reason, there will be instances when you will need immediate cash right away.

Some people cash in by selling back their endowments to the firms where they purchased them from. However, this is not the wisest choice to take. These forms will only offer an insignificant amount for cashing in early. This amount may not be enough to satisfy your needs.

The answer lies in selling your endowment policy. This way, you get to sell your life insurance policy at a much higher value. With a much higher selling value, there will be more money at hand. This is the best option you can take.

There are various firms that will offer to buy these policies from you. There is a reason why they do this. They do this for investment purposes. In the long run, they will profit from buying your policy from you. It is a win-win situation for both sides. They earn more from their investment, and you get immediate cash for whatever needs you may have.

Although you do not get the entire amount compared to when the policy matures. It is still higher than what the insurance firms have to offer. You can get an offer that is much as 30% higher than what insurance firms have to offer. This is the most viable option you can take when selling your endowment policy.

In a rocky economy, there are more and more people that are in need of immediate cash. There are so many people who are getting desperate. There are just less opportunities to go by. This is when selling your endowment policy will be the best option for you to take. This way, there will be no more need for you to despair. When it comes to selling endowment policies, you no longer have to depend on the insignificant amounts insurance firms have to offer. There are other options you can take. There is a way for you to get more value for your life insurance policy. There is a way for you to get more money. You get quick cash by selling your endowment policy.

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Quick Settlement Through Endowments Selling

Are you the recipient of an endowment policy? If you are, the amount of time before the settlement matures may be too long for you. You may have an immediate need, and there is no way for you get the money right away. In case of emergencies or whenever a need presents itself, there will be no way for you to capitalize on your settlement. This was in the past. Now, you can make use of endowments selling.

We all know how these policies work. You will have to wait a considerable amount of time for you to enjoy the benefits. You have to wait for a number of years before you see any money. True, your future is secured, but you will have to wait for this time to come. Sadly, you never know when emergencies may come. No one wants to be stuck in a situation wherein you have no options.

These insurance firms may have the option to let you collect your settlement at an earlier date. However, the value of the settlement is too low for you to accept. The amount may not be enough to take care of the immediate need. Furthermore, the amount may not be enough to cover the initial investment of the policy. Cashing out early is just not worth it.

Through endowment selling, you are presented with much better options. With this option, you get a much higher value for your policy compared to the surrender value of these insurance firms. Compared to surrendering your policy, the amount you get from selling is much greater. This simply means that you get to take care of situations like emergencies in a much better way.

In today's troubled times, there is a greater need to have ready cash at hand. However, due to the financial crisis, there is just not enough ready cash to come by. This is when we have to make use of endowments selling. This presents us with options to take care of situations that need ready cash at hand. This way, you are always on your guard.

You may ask yourself how much more will you get from selling your policy? The value varies from policy to policy. However, it is still much larger than what the insurance firm has to offer for a surrender value. There are some policies that sell for 30% more compared to surrendering the policy. As you can see, the amount is much more significant.

Why are these policies purchased? Firms purchase these policies to gain more from their investment in the long run. This is why endowments are in demand. However, you have to understand that there are endowments that are more in demand compared to others. It is not the same for all policies. With this option, you not only get to cash out before your endowment matures; you get a higher value compared to surrendering it to the firm. This is a much better option for you to take. This is how you enjoy quick settlement through endowments selling.

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Selling Endowments

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.

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