Traded Life Policy (TLP)

I read an article of the latest issue of The Edge, which is about TLP (Traded Life Policy)

It is new to me that life policy can be traded, and secondary market exists. Digging more to understand further. It means we can cash-out more, instead of only the cash value with insurance company... hmm...

More info on the TLP from MoneySense for those interested.

http://www.moneysense.gov.sg/understandi...icies.aspx

(29-04-2013, 11:53 AM)CityFarmer Wrote: I read an article of the latest issue of The Edge, which is about TLP (Traded Life Policy)

It is new to me that life policy can be traded, and secondary market exists. Digging more to understand further. It means we can cash-out more, instead of only the cash value with insurance company... hmm...

More info on the TLP from MoneySense for those interested.

http://www.moneysense.gov.sg/understandi...icies.aspx

I remembered the late Dennis Ng marketing TEPs from UK during Wallstraits days...
From the link you provided, looks like it's a similar product and not local ones. Extracts from Q3,

Legal Risks: The TLP and TEP products that are currently distributed to local investors are generally policies acquired overseas. This makes it difficult for local investors to assess the quality of TLP and TEP products sold. Should any grievance or conflict arise, investors would need to enforce their contracts against life insurance companies located overseas and deal with the legal system of that overseas jurisdiction. Investors may therefore face significant difficulties enforcing their rights. This is because the legal system of the overseas jurisdiction may differ from that of Singapore’s.

.

Foreign Exchange Risk: The benefits from the policy may be paid in a foreign currency. Investors may have to bear the exchange rate risks of converting these benefits into the local currency.

It's for short term cashflow, something like going to the pawn shop, and pawn ur life policy with surrender value.
Then pay interests to get it back!

Isn't it dangerous to have a policy by which someone (who u dun trust) will benefit from your death? Especially if you are still in the pink of health...

(29-04-2013, 01:31 PM)brattzz Wrote: It's for short term cashflow, something like going to the pawn shop, and pawn ur life policy with surrender value.
Then pay interests to get it back!

It follows diff business model, not a "pawn", but a "sell", base on the cover story in The Edge.

It is sold in Singapore, but with oversea policies. It seems riskier than i assume. Moreover the fund's fee structure is

- front-loaded (sale charge) fee 5%
- back-loaded (redemption) fee 3%
- annual management fee 1%

Wow... not much left for the investors...

(29-04-2013, 02:36 PM)CityFarmer Wrote:

(29-04-2013, 01:31 PM)brattzz Wrote: It's for short term cashflow, something like going to the pawn shop, and pawn ur life policy with surrender value.
Then pay interests to get it back!

It follows diff business model, not a "pawn", but a "sell", base on the cover story in The Edge.

It is sold in Singapore, but with oversea policies. It seems riskier than i assume. Moreover the fund's fee structure is

- front-loaded (sale charge) fee 5%
- back-loaded (redemption) fee 3%
- annual management fee 1%

Wow... not much left for the investors...

Not really. You can do it in Singapore too. Check out this company.

http://www.repsholdings.com.sg/index.html

The whole idea is simply assign the endowment to another person and give him/her the full right to the policy. In fact, can even just go find your own buyer, and assign the policy to him/her. The company simply just act as the middle man in this buy/sell arrangement.

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(29-04-2013, 02:23 PM)smallcaps Wrote: Isn't it dangerous to have a policy by which someone (who u dun trust) will benefit from your death? Especially if you are still in the pink of health...

Usually for endowment policies with fix maturity period. Like that, the buyer need not to know if the insured is alive or dead, just simply make claim when the policy matured.

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(29-04-2013, 01:31 PM)brattzz Wrote: It's for short term cashflow, something like going to the pawn shop, and pawn ur life policy with surrender value.
Then pay interests to get it back!

Don't have to do that. Just borrow from your insurance policy. Think last known interest is around 7%pa.

(29-04-2013, 03:45 PM)NTL Wrote: Don't have to do that. Just borrow from your insurance policy. Think last known interest is around 7%pa.

I think GE is at 6%

(29-04-2013, 03:45 PM)NTL Wrote:

(29-04-2013, 02:36 PM)CityFarmer Wrote:

(29-04-2013, 01:31 PM)brattzz Wrote: It's for short term cashflow, something like going to the pawn shop, and pawn ur life policy with surrender value.
Then pay interests to get it back!

It follows diff business model, not a "pawn", but a "sell", base on the cover story in The Edge.

It is sold in Singapore, but with oversea policies. It seems riskier than i assume. Moreover the fund's fee structure is

- front-loaded (sale charge) fee 5%
- back-loaded (redemption) fee 3%
- annual management fee 1%

Wow... not much left for the investors...

Not really. You can do it in Singapore too. Check out this company.

http://www.repsholdings.com.sg/index.html

The whole idea is simply assign the endowment to another person and give him/her the full right to the policy. In fact, can even just go find your own buyer, and assign the policy to him/her. The company simply just act as the middle man in this buy/sell arrangement.

Well, not aware it is available in Singapore.

So the company is different from fund, which bought the policies, rather acted as intermediary.

For buyer, a choice to get a policy without paying a hefty up-front fees as commission? Hmm...

Yes, in the beginning of WS days Dennis was pushing this product and he claimed that he himself have invested in it. However after the GFC he has stopped selling. Why? Simple, the British pound sank whereas S$ appreciated. All in the Pound has dropped like 30% from then till now. So if he still owns it until his demise he would have lost on this investment just on forex risk.

Forex aside, seriously guys, do you want to invest in this kind of products. you get your fat payout on the early demise of those original policy holders. In other words you are wishing that those people you buy from die early. My conscience would stop me from doing so no matter how good the pay-off is. It's the same as buying a listed company that runs funeral parlour/cemetries. Business is good when a lot of people die and you want to wish for that?? Well to each his own.

(29-04-2013, 10:50 PM)Jacmar Wrote: Forex aside, seriously guys, do you want to invest in this kind of products. you get your fat payout on the early demise of those original policy holders. In other words you are wishing that those people you buy from die early. My conscience would stop me from doing so no matter how good the pay-off is. It's the same as buying a listed company that runs funeral parlour/cemetries. Business is good when a lot of people die and you want to wish for that?? Well to each his own.

60 Minutes did a piece on this many years ago when this started in the States.

The way they look at this is helping terminal illness patients (for example) to have a better quality of life now instead and providing an essential service. It is disagreeable because the companies target those who are desperate and terminal cases.

However, I disagree with your assertion that a funeral parlour's /undertaker's hopes for people to die so they have more business. That's plain wrong and I feel strongly about it as relatives have been in this business for generations. It is just the natural cycle of things.