• PolicyWoke

Where did TEP / TLP (Traded Endowment / Life Policies) come from?

Updated: Jul 20

I was intrigued by the term Traded Endowment and Life Plans that has sprung up during my course of work. Hence I made a move to walk through the history along and this is what I found.

  1. Traded Endowments first originated from the UK (United Kingdom). The traditional manner for endowments was to surrender. However, increasingly, people became open to the idea of auctioning the policy for a higher return in 1998.

  2. As more people gain knowledge of it, it pathed the way to a secondary market where TEPs started, and it has developed into a relatively matured market.

  3. Today in the United Kingdom, Consumers who intend to surrender their policies have to be informed by their insurer of the option of selling the policy (including in a secondary market) as an alternative.

  4. A quick search online suggest that UK have a very robust and matured TEP market. They have two Association and they are namely ELSA (European Life Settlement Association) and APMM (Association of Policy Market Makers). Resale policies are very common.

Why are TEPs / TLPs interesting to Policyholders and Investors?

It’s a Win-Win Outcome

(Policyholder example) James decided to surrender his endowment policy. He was referred to check out the TEPs market place. Instead of getting $18,100 by surrendering his policy to the insurer, he found Carol who offer 5% more to take over (buy over) his policy. James walks away with $900 more than surrendering it to the Insurer. BUT WAIT! Why would an investor pay more to take over from James and continues paying premium?!

(Investor example) Carol invested into James’ “pre-loved” "resale" endowment policy with an invested value of $19,000. The next year, after paying a premium of $900.00, the policy is projected to grow to $21,000.

$21,000 - $19,000 - $900 = $1,100 of bonus yield (after factoring the $900)
Yield is $1,100 / $19,000 = 5.79%

Does this sound attractive to you as an investment, even though it is non-guaranteed? Of course, even if it drops to $800 per year, it’s still a cool 4% investment.

And, Carol has the option to surrender anytime when she feel its not meeting her investment objective.

Attractive Capital Preservation for Investors

Investors buying into “pre-loved” "resale" endowment policy sees attractive capital preservation. They are unlikely to lose much capital (if any) as the distribution costs and fees are paid early during the initial years.

Having mentioned the above, there is still the risk of an insurer closing down.

Hence it is important to find a specialist in such policies.

Current Progression in Singapore

TEPs first landed into Singapore sometime in 2007. This market was largely led by TEP Pte Ltd by Jay Nasir.

In the early days, TEPs marketed in Singapore are UK based policy. Hence the resale policies offered are in British pound (“GBP”) which are subjected to currency risk.

GBPSGD 20-year chart

Based on the above chart taken from Exchange Conversions, you would see that the gains (8%) would have been negated by the exchange rate in GBP. This is probably why there was limited traction in Singapore.

In-lieu of currency risk, a number of companies saw opportunities and have since started dealing with TEPs issued in Singapore:

  • 2010 - Reps Holdings pioneering Singapore Policy Market.

  • 2012 - Purvis Capital followed closely. It is interesting to note that Purvis Capital was led by Mr Lim Wah Tong, Executive Director of Philips Securities Pte Ltd.

  • 2016 - Conservation Capital - One the newer player in the market, they have a lot of marketing done on the radio for surrendering policies, managed by Mr Trevor Xie.

  • 2017 - First Grand Capital moved into the market.

  • 2018 - Eazi Capital was setup, and being a recent player did not listed much policies yet.


There are also a few companies like STEPS (Singapore Traded Endowment Policies Specialist) and TES Pte Ltd in the recent years.

Why it matters to me?

Having been interest in the finance industry space (especially insurance) led me to dive deeper into TEPs / TLPs. TEPs seem to benefit all parties, whether be it the insurer, the client, or the buyer.

If you are interested to know more about TEPs, do contact PolicyWoke Pte. Ltd.

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