Providing guaranteed life cover and investment, UK endowment policies have long been seen as an ideal vehicle for mortgage repayment. The policy owner makes a regular investment in the form of premiums over a fixed number of years, in return for a cash sum at the end of the policy’s life, or if the insured dies. In order to deliver the necessary returns, the life office invests the premiums in with-profit funds.
TEPs are widely regarded as one of the simplest, most secure forms of investment available. Put simply, a TEP is a traditional with-profit endowment life assurance policy that has been sold on by the original owner. They are highly attractive investments because most of the life office’s upfront expenses will have been recouped from the original policyholder’s premiums. The traded policy brings with it the benefit of the stronger investment growth enjoyed in the later years of the policy.
With valuable locked-in benefits and equity driven performance they offer low risk, high return benefits to anyone with a reasonable sized asset base.