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Written by tolumi
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Friday, 05 December 2008 15:29 |
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Offshore Tep PurchaseThe possible mis-selling scandal of endowments has sparked a surge in the number of policies being surrendered rather than retained, says Lee Portnoi, managing director of Absolute Assigned Policies. This has been an advantage to the investors in traded endowment policies as supplies, which have historically been very limited for investors for every policy, are now increasing. He believes that despite reductions in bonus rates over the last few years, TEPs remain a low risk and relatively high yielding investment that has become the component of many international investors’ portfolios and has helped push the trade to an estimated £500m per annum. Offshore Tep Purchase - Current Crisis“The current crisis in the Middle East and subsequent reverberations around the world markets have caused many investors to re-think their investment strategies,” Portnoi says. “Wall Street suffered its fifth biggest fall ever recently and continued political uncertainty means that making the right investment choice is even more critical. “There are several benefits of investing in TEPs. They are low risk, secure investments providing capital guarantees. The policies are issued by substantial and highly-rated insurance companies who have combined assets of over £440 billion invested in gilts, blue chip shares, property and other secure forms of investment. The basic sum assured and accumulated bonuses are guaranteed by the assurance company, which additionally commits each year to pay further bonuses, including a terminal bonus when the policy matures.” Offshore Tep Purchase & InvestorsInvestors can choose to invest in a managed fund, which invests in TEPs on their behalf, or purchase policies directly themselves from a market maker.
The guaranteed element of a mid-term endowment policy, together with the favourable returns when compared to many other forms of investment, means investors can obtain a relatively high yield with a minimum of risk. Pricing discount rates for TEPs are at present between 9 per cent and 13.5 per cent, varying according to the time to maturity. Investors purchasing TEPs don’t have to pay any commission or administration costs, just the purchase price and the premiums until the policy matures. 
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Last Updated on Tuesday, 06 January 2009 14:01 |
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