Savings Plans With Higher Returns? It’s Possible With Traded Endowment Policies

This article is written in collaboration with TES Capital. All views expressed in the article are the independent opinions of Sethisfy.com. Read Sethisfy.com’s editorial policy. None of this site’s content constitute personal financial advice and you should do your own due diligence before making any financial decision.

I have been very vocal about the downsides of savings plans, but at the end of the day, there are people who still prefer the stability and familiarity of savings plans. They do not want to see volatility in their savings, and prefer to have a product that helps them to save over a time period with steady and stable returns. I personally know such people exist because my own parents, as well as some friends and relatives are exactly like this.

For many, buying a savings plan is better than not saving at all, or not doing anything with their money. Before going out to buy a savings plan, however, we should know that there is a much better option: “second hand” savings policies!

“Second hand” typically sounds like something inferior, especially if you are talking about physical goods like electronics or cars, but when it comes to savings policies, it’s a really good thing.

Traded Endowment Policies mitigate distribution costs

Such policies are called Traded Endowment Policies (TEP), and they are policies people sell due to a few reasons, usually because they cannot afford the premium any more, or wish to use the money locked up in the policy. By selling their policies, they get a significantly higher amount than they would have if they were to surrender the policy with the insurance company. You can see this article for more details. 

One of the main reasons why buying a Traded Endowment Policy is far superior to getting it “new” from an insurance agent is because your returns tend to be better. The reason why savings plans are such a bad deal is largely because of the high distribution costs incurred at the start of the policy. When you purchase a Traded Endowment Policy, this is what happens instead:

For this policy, the original policyholder has already paid $14,384 in premiums (4 years of $3,596 annual premium), and a person who buys it now will pay $12,016.  This lowered price can defray most, or even all, of the distribution costs, thus leading to better returns compared to buying a similar policy from an insurance agent. This is where the “second hand” nature of Traded Endowment Policies works out for you.

Take a look at this list of Traded Endowment Policies and you can see that the projected returns can be significantly more attractive than the projected returns of policies bought new from insurers. 

Shorter tenures

The next reason why TEPs are better than savings plan bought from insurance agents is the fact that you can select plans of shorter tenures if you wish. Regular premium savings plans bought from insurance companies tend to be at least 10 years in duration, while TEPs can be found for as short as 4 to 6 years from their maturity date.


Moreover, these policies have been around for some time and have built up guaranteed cash values over the years. This provides greater peace of mind compared to more volatile investments, and particularly appealing to those who seek stability in their returns and want some form of guaranteed values.

Given the shorter tenures and built up cash values, TEPs can be a good choice for shorter time horizons and less appetite for volatility.

Very convenient to buy

The third reason why you can consider Traded Endowment Plans is that they are really convenient to buy. First of all, there is absolutely no underwriting because the policy is already issued under the original policyholder. This means that there are no medical checkups, and you won’t even need to fill out lengthy insurance application forms. 

If you want to get a Traded Endowment Policy, TES Capital has provided a very attractive promo for Sethisfy.com readers: get a discount of $250 when you buy the policy!

All you need to do is to 

  1. Whatsapp TES (Shawn) at 8917 5326 and quote SETHISFY for $250 discount! You can also tap this
  2. Inform Shawn of the plan you like or ask him to recommend a plan
  3. Fill up this form to secure your $250 discount

On top of that, you can easily see the list of products available. TES currently has the most extensive list with the most number of policies available for sale (over 250 plans and over $7M worth of inventory), and you can easily pick and choose something that suits you.  

A benefit you probably shouldn’t count on

One more benefit of traded endowment that is rather interesting is something you shouldn’t count on, but it’s a nice benefit if it does happens: the death of the original policyholder results in you getting the death payout of the policy! As the buyer and new owner of the policy , you can get all the benefits of the policies, and this includes the death benefit. If it happens, the returns on your Traded Endowment will likely skyrocket since you now get a nice lump sum payout without having to wait for your plan to mature. It might feel a little strange or morbid to gain from someone’s passing, but you bought the policy, and all the benefits are now yours. 

Conclusion

If savings plans are something you or someone you know have been considering, you should definitely look at Traded Endowment Policies instead. You get to enjoy superior returns, a wide range of choices, and it’s hassle-free to apply. Don’t forget to quote SETHISFY and fill out this form to secure your $250 discount!


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