Do What Is Best For Your Clients
There are a number of reasons why policyholders or your clients seek to give up their insurance policies. Although the decision to surrender an insurance policy should be considered carefully and be taken only as a last resort, it is part of the duty of a financial adviser to give their client the best advice on maximising the highest value for their policy once they have made the decision to surrender.
The secondary markets for life insurance policy have existed in many countries, such as UK, US, Australia and Germany, with strong financial regulations. In the United Kingdom, Financial Services Authority passed the Traded Endowment Policy and Open Market Option Disclosure Requirements Instrument 2002 in which insurance companies are required by law to make known to the policyholders who seek information on surrender values that they may be able to sell their policy as an alternative. We should assist policyholders make informed choices (Read Page).
The trading of life and endowment policies are currently not regulated by Monetary Authority of Singapore (MAS). This means that any person or entity who is involved in the sales, purchase and distribution are not regulated by MAS (Read up more on MoneySENSE). Therefore it is important to recommend a company with a strong financial status when it comes to selling your client’s life insurance policy.