Offshore Tep Purchase

The 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

“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 & Investors

Investors purchasing TEPs don’t have to pay any commission or administration costs, just the purchase price and the premiums until the policy matures.