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| Buying a second
hand endowment, known as a traded endowment policy (TEP) can be used as
an investment strategy for a number of reasons. You may be planning an investment strategy for retirement, paying school fees or a wedding for example. Investing in a traded endowment policy may be a good investment, particularly if you look to buy into policies nearing maturity. These policies benefitted during the 1980's and 90's when bonus rates were relatively high. If you decide to buy a traded endowment, you are, in effect, buying a 'with profits' endowment policy second hand from the policyholder who has sold the policy, usually to raise cash. Once you have bought the policy, you are
taking on an endowment mid term, usually with at least five years' worth
of bonuses locked in. You will agree to continue paying the premiums
until the policy's maturity date. |
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