Recent shocks to the TEP market and high demand for policies are pushing the value of traded endowment policies up to extraordinary levels, according to TEP trading platform, TEP Exchange.
Policies from the major life offices, including Clerical Medical, Pearl, Royal London, Standard Life and Norwich Union are in the highest demand say the Internet trading platform.
“It’s generally said that the average value increase for policies traded on the market is 15 to 30 per cent above surrender value,” said TEP Exchange marketing manager Irene Loucas.
“A Royal London policy with a surrender value of £6,069 recently received an instant offer and purchase of £11,851 through the site, which shows the importance of good financial advice.”
The Association of British Insurer’s recent announcement that an estimated 60 per cent of endowment policyholders will be receiving red or amber letters from their insurers indicating a shortfall in the accumulated value of their policies.
The FSA ruling - effective 1 September - that all Life Companies must make clients aware that instead of policy surrender, the open market might be more profitable is also likely to have fuelled the market.
