Traded endowment policies could become popular with consumers as a lower risk investment option offe...
Traded endowment policies could become popular with consumers as a lower risk investment option offering decent returns, suggest figures produce by Policy Portfolio, as average annualised growth in excess of 8% for the year to May 2002.
The TEPs market has grown significantly over the years since their launch, but it is only in recent months when markets have been volatile that these guaranteed products have come into their own.
That is because the original investment made is locked into the product for the full term, so as long as premiums continue to be paid, guaranteed returns will be seen through the basic sum assured and bonuses allocated at the time of purchase, says Brian Goldstein, managing director of Policy Portfolio.
"Traded endowments are low risk investment vehicles and an attractive alternative to equities in the current volatile financial climate. TEPs offer a similar level of security to building societies but have the potential for growth. Where Policy Portfolio's returns for TEPs maturing during the twelve months ending May 2002 was 8.23%, the average net return from building society accounts for 2001 was 3.05%."
Because expenses incurred during the early years of the endowment's term were likely to have been met by the original policyholder, TEPs purchase appear to offer the best of both world because they invariably pay 10% to 15% more than the surrender value offered by life companies, and guarantee to at least pay out something.
To receive free comparisons of maturity values for declared bonus rates, call Policy Portfolio on 020 8343 4567.
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