Endowment Investment TV

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The general view of investing in Endowment Policy



Endowment Policy

The endowment policy is a type of life insurance policy that designed to pay a lump sum at a certain time or if the person dies an endowment policy may mature at ten, fifteen, or twenty years and some of these policies may also provide money if there is a serious illness. Endowment policies are generally the traditional with-profits or unit-linked and with unitised with-profits funds.


Surrender Value and Adjusted Market Value

Endowments can sometimes be chased early or surrendered early and the policy holder receives the amount of the surrender value determined by the insurance company. How much is received is going to depend on how long the endowment policy has been in effect and the amount paid in to it. Under bad investment conditions the encashment or surrender value may be reduced by a market value adjuster to squeeze out some cash during the time when investment conditions are not good and this means the investor will received only the surrender value minus the adjusted market value.

Firm bagged £165,000 in commission from 29 TEP sales

30 July 2010 | By Leah Milner


The adviser firm which the FSA censured earlier today pocketed £165,000 in commission for the 29 geared traded endowment policy sales it made over the period covered by the regulator’s enforcement action.

The figure equates to approximately £5,700 per geared TEP sold.

The FSA’s final notice for The Garrison Finance Centre Limited  reveals that the Yorkshire based IFA escaped a £35,000 fine because it is in liquidation and the regulator wanted to safeguard any remaining funds to pay client redress.

All the TEP sales were made by a single adviser at the firm, although the individual is not understood to be subject to separate enforcement action.

Several of the firm’s clients remortgaged their properties in order to take out the geared TEP policies, however they were not warned of the risk to their properties through this gearing.

Only one of the clients was warned of the possibility that they might have to inject further capital to keep their TEPs going.

The FSA found that in some cases clients’ attitude to risk was not recorded and in instances where they were, the risk profile was not consistent across all documentation.

In some cases the recommendation to take out a geared TEP did not match the customers’ risk profile.

Documents sent by Garrison to clients often lacked clear or balanced information to enable to make an informed judgement on whether or not to accept the product recommendation.

A review by an external compliance consultant found that all the TEP sales over the period failed to comply with FSA principles.

from Money Marketing published on 30 July 2010