What are secondhand endowment policies?
It is an endowment policy that has been sold by the original policy owner to an investor other than the insurer. They can also be called traded endowment policies or resale endowment policies. You may refer to this link by Moneysense (a Singapore Government Financial Literacy program) for an independent explanation of secondhand endowment policies.
What types of policies does Endowment Exchange transact in?
Endowment Exchange currently transacts in endowment and whole life policies, issued by insurance companies in Singapore.
Is buying and selling secondhand endowments legal?
Yes. A policy owner is allowed to transfer the ownership of the policy via what is known as an “absolute reassignment.” The new policy owner will own the rights, benefits and obligations of the policy thereafter.
In other countries such as the UK, it is actually mandatory for insurers to tell policy owners about the existence of the Resale Endowment market, so that policy owners may obtain the best possible price.
What if the life assured passes away?
When a policy is transferred, the new policy owner is typically unaware whether or not the life assured has passed on. So even if the life assured has passed on, the policy will continue on to maturity.
Theoretically, if the new policy owner is made aware that the life assured has passed on, the new policy owner may contact the insurance company for the maturity amount at an earlier date.
As we do not keep in contact with the life assured after the transaction, we always fully expect to service the endowment policy till maturity.
Are the illustrated returns of an endowment policy guaranteed?
Participating endowment policies have guaranteed and non-guaranteed components in the benefit illustration. The guaranteed component is the amount you will get (as promised by the insurer), while the non-guaranteed component is a projection by the insurer and is not fixed.
What if the insurance company goes bankrupt?
MAS’s preferred course of action is to transfer the insurance business of the failed insurer to another insurer, as there is less disruption to policy owners. Alternatively, Singapore Deposit Insurance Corporation Limited (SDIC) will take over the business of the failed insurer.
The Policy Owners’ Protection Scheme (PPF Scheme) has also been set up to protect policy owners, up to a cap of S$500,000 for the aggregate guaranteed sum assured and S$100,000 aggregate guaranteed surrender value per life assured per insurer. You may refer to the Singapore Deposit Insurance Corporation (SDIC) website for more details.
Contact Us
If you have any questions, do call/whatsapp us at 82880681 or email hello@endowmentexchange.com