Traded Life Policy (TLP)

[NTL]

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.

I believe Dennis was talking about Traded Endowment Plans, not Whole Life Plans. For TEP, it supposed to be held until the maturity of the policy, then make the claim from the insurance company. There is nothing about "fat payout on the early demise of those original policyholders". Even if you know that the insured is dead, you still can't claim from the insurers as you will need to provide the death certificate to make the claim.

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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...

The final payout is calculated with the upfront fees, so still cannot escape from it.

Hmm... just realised that RepsHoldings website only indicate that they are buying policies. Previously they had a section on selling policies, and had listed the details of a few of the policies they have in hand. Wonder if they still selling...

[Jacmar]

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.

I think I have to apologise for my "assertion" . Anyway my point is that the health of their biz is directly proportionate to the number of demised whether they wish it or not.

As for Dennis products I believed it was Traded Life Policies. Correct me if I am wrong.

[smallcaps]

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.

I believe Dennis was talking about Traded Endowment Plans, not Whole Life Plans. For TEP, it supposed to be held until the maturity of the policy, then make the claim from the insurance company. There is nothing about "fat payout on the early demise of those original policyholders". Even if you know that the insured is dead, you still can't claim from the insurers as you will need to provide the death certificate to make the claim.

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Here's TEP from wiki. Still seems to me that it's like putting a bounty on myself. Better not, dunno wat people would do when they are under financial stress...

Traded endowments

Traded endowment policies (TEPs) or second hand endowment policies (SHEPs) are traditional with-profits endowments that have been sold to a new owner part way through their term. The TEP market enables buyers (investors) to buy unwanted endowment policies for more than the surrender value offered by the insurance company. Investors will pay more than the surrender value because the policy has greater value if it is kept in force than if it is terminated early.
When a policy is sold, all beneficial rights on the policy are transferred to the new owner. The new owner takes on responsibility for future premium payments and collects the maturity value when the policy matures or the death benefit when the original life assured dies. Policyholders who sell their policies, no longer benefit from the life cover and should consider whether to take out alternative cover.
The TEP market deals exclusively with Traditional With Profits policies. The easiest way of determining whether an endowment policy is in this category is to check to see whether your policy document mentions units, indicating it is a Unitised With Profits or Unit Linked policy, if bonuses are in sterling and there is no mention of units then it is probably a traditional With Profits. The other types of policies - “Unit Linked” and “Unitised With Profits” have a performance factor which is dependent directly on current investment market conditions. These are not tradable as the guarantees on the policy are much lower and there is no gap between the surrender value and the market value...

[CityFarmer]

The final payout is calculated with the upfront fees, so still cannot escape from it.
...

Not sure the rational to include upfront fees paid, since surrender value is the only "asset" traded.

[NTL]

The final payout is calculated with the upfront fees, so still cannot escape from it.
...

Not sure the rational to include upfront fees paid, since surrender value is the only "asset" traded.

Hmmm... Maybe you are right. Afterall, when buying over the policy, it is based on the existing value.