UK Traded Endowment

[Dennis Ng]

Since the investment and payout is in British pound, would like to seek some advise on following.
- how do we assess the currency exchange risk ?
- is the long term prospect for pound stable (at least) ?

Thanks for advise.

nobody has crystal ball and can predict exchange rates in 5 years' time.

As what I learned from Jim Rogers, is to have a historical perspective. After doing some homework, I realise that currently sterling pounds is trading at lowest level against S$ in the last 20 to 30 years.

There'll be Olympic in London in year 2012, thus, the next few years for UK should be better, not worse, and thus, in my opinion, the likelihood of sterling pounds going lower is very low, and of it going higher is higher.

Personally, recently I added my investment into UK Traded Endowment to take advantage of the current low exchange rate.

How to mitigate risks? I do so by putting my "eggs" (money) in different baskets. I invested about 11% of my money into UK Traded Endowment, so anything adverse happens, only affects a portion of my entire wealth (overall portfolio). The Rich invest on a Portfolio basis, this is something I learn from the Rich.


Even if sterling pounds drops, there is still a buffer, since the annual returns of 5% to 8% of UK Endowment can withstand some loss in exchange rate before you would really be losing money.

Assuming annual returns of 5%, and a 5 years UK Traded Endowment, means I have a buffer of 25% adverse movement of sterling pounds against S$ before I lose money. It is sufficient buffer for me. (Just my personal opinion).

Everyone heard the news recently. Britain is the only nation to reject a tighter fiscal alliance in the bloc aimed at ending Europe's worst financial crisis in generations, while 26 other EU members approved changes to the bloc treaty.
Deputy Prime Minister Nick Clegg warned 'there is a danger that the UK will be isolated and marginalised within the European Union'.
Will this translate to a danger on the strength of sterling pounds in future, and thus my investment in UK traded endowment?

A Real Investor already factored in possible downside risks to investment and for UK Traded Endowment, exchange rate of UK Sterling Pounds is a risk of this investment, this should be Crystal Clear to all investors. A Real Investor always ask themselves 2 questions:

1. what if I'm wrong, will I be financially ok?
2. What's the upside potential, what's the downside risks? Is upside at least double downside?

When I asked myself these questions, UK Traded Endowment fulfill both Criteria and that is why I invest (about quarter million dollars) into UK Traded Endowment.

Since the announcement till now, UK Sterling pounds exchange rate has remained stable, and actually, there is a possibility that 2 years from NOW, there will NO longer be Euro.

I personally think that it is easy for the 26 nations to say yes to German's proposal on Fiscal Policy Discipline, but it is almost impossible to implement, and the people in Italy, Spain, Greece, Portugal may overthrow the government when further austerity measures are implemented.

So anyone thinking that Europe's problem is solved by this latest "agreement" I think is just trying to delude themselves.

Brace yourself for the Next Global Financial Crisis. In a Crisis, when stock prices fall 50%, property prices fall 30%. On the other hand, you enjoy 100% Capital Guarantee on the Cash Value of UK Traded Endowment, that's the main reason I Invest into UK Traded Endowment, for the Capital Guarantee in case of Global Uncertainties.

And whatever happened would actually reinforce the reason why I personally invest into UK Traded Endowment.

[Dennis Ng]

Stocks Drop in Asia on European Debt Concern

By Lynn Thomasson - Dec 13, 2011 8:34 AM GMT+0800

Asian makers of semiconductors and chipmaking-equipment may decline today after Intel Corp., the world’s largest chipmaker, cut its sales forecast. Photographer: Jacob Kepler/Bloomberg

Asian stocks (MXAP) and the Australian dollar fell after Moody’s Investors Service and Fitch Ratings said the European Union summit last week did little to ease pressure on the region’s struggling governments.

The MSCI Asia Pacific Index slid 1 percent as of 9:31 a.m. in Tokyo. The so-called Aussie fell 0.2 percent, while the S&P/ASX 200 Index sank 1.4 percent. The euro was little changed at $1.3179 after a 1.5 percent retreat yesterday. Oil was also little changed at $97.85 a barrel while Standard & Poor’s 500 Index futures gained 0.3 percent.

The EU summit offered few new measures and doesn’t diminish the risk of credit downgrades on European nations, Moody’s said yesterday. Fitch said a comprehensive solution has not yet been offered and predicted a “significant economic downturn” in the region. Economic data later today may show Germany’s investor confidence slid to a three-year low, while sales at U.S. retailers probably rose in November, based on a survey of economists’ estimates compiled by Bloomberg.

Asian makers of semiconductors and chipmaking-equipment may decline today after Intel Corp. (INTC), the world’s largest chipmaker, cut its sales forecast. The Santa-Clara, California-based company said flooding in Thailand had caused a shortage of hard- disk drives that is forcing computer makers to cut orders for other parts.

The European Financial Stability Facility will auction as much as 2 billion euros ($2.6 billion) of 91-day bills today, while Greece will sell 1.25 billion euros of 182-day bills. Belgium will offer 1.2 billion euros of short-term debt and Spain will auction 364-day and 553-day bills.

The ZEW Center for European Economic Research may say its index of German investor and analyst expectations, which aims to predict developments six months in advance, declined to minus 55.8 in December, according to the median estimate in a Bloomberg News survey of economists. That would be the lowest reading since October 2008.

To contact the reporter on this story: Lynn Thomasson in Hong Kong at lthomasson@bloomberg.net

[Dennis Ng]

哪里知道，美国投资者并不是这么想，美国的投资者把标准普尔的行动视为逼宫，逼欧盟在12月9日的会议上，能讨论出一个拯救欧债危机的方案。12月6日美股大升。今年8月，美国主权评级被降一级时，不少分析认为这是标准普尔向美国共和、民主两党施加压力的行动，要求两党尽快谈出一个彼此妥协的财政预算案。

标准普尔会不会在3个月后将欧元区国家主权评级降级？机会是相当大的，可以无限量印钞票来还债的美国都已经被降级，而至12月5日仍然吵吵闹闹，得不出一个大家皆同意的拯救欧债方案的欧元区国家，就更应该降级了。

欧盟峰会结束，这是一个大摊牌的会议。过去几年，如何处理欧债危机有两个极端建议，一是德国坚持的，要求欧元区政府交出部份财政自主权，这样德国才愿意出手救欧债，二是逼欧洲央行印钞救欧债。

12月9日结束的欧盟峰会可以说是德国的大胜利，不但欧元区17国全部同意签订这个新的条约，交出部份财政自主权以取得全球债主的信心，更吸引了9个非欧元区政府也同意签订这个新协议，欧盟27国中唯一不签新协议的是英国。

本来，德国是要求改变欧盟条约，但是改变欧盟条约得所有27国政府皆同意才行，现在英国不签，就由26国自行签新条约，英国不签的后果是将来英国自生自灭。近日英国出现非常大规模的公务员罢工，学校、机场全出了问题。老百姓不会支持削减福利的政策，政府要减缩开支谈何容易。英国已开始推量化宽松，印钞票，一旦将来出现英镑危机，欧盟不会出手相救，唯一解救英国的是同文同种的美国。长期以来，英国因为不加入欧元区，在欧盟中只能当配角，英国人的情意结是到底英国应该融入地理位置接近的欧洲？还是融入同文同种的美国？


？

Anna
感谢您的分享。

Dennis
如果在未来的一天，英国还债务危机，他们只能像美国即采取同样的行动打印了很多钱，基本上英国央行和美联储作业系统一样，他们印钞票买政府发行的债券。
如果发生这种情况，英国英镑会贬值多少,比较亚洲主要货币，如人民币，日元等？

cheers
ctsan
Happy new year to all forum members

Hi ctsan,
nobody can answer or predict that.

The FACT is U.S. and Europe is in Worst Shape than U.K. So this is why recently when U.S. dollar goes up against Euro, UK Sterling Pound performs better compared to Euro and remains stable (above S$2 against S$).

Do you have any investment that has 90% Capital Guarantee even if the whole world collapses?

I can't think of any other investment that offers this Protection other than UK Endowment, which is why I have 7% of my money invested into UK Endowment. Similarly, I don't put all my eggs into one basket, including UK Endowment.

Currently, 70% of my wealth is in Cash (65% in Opportunity fund, 5% for Just in case Fund)...as I'm awaiting for Great Opportunity to invest in the Coming Crash and coming Global Financial Crisis.

Many people are unprepared for a coming Global Financial Crisis and their wealth is NOT positioned in a way to benefit from a Crisis but likely they would lose most f their wealth in the coming Crisis.

People need to remember that the Worse a Crisis is, the BETTER the Opportunities are, provided you've Prepared and Positioned yourself appropriately.

[louiskst]

Hi all,

How to determine the price fo TEP? What is the minimum capital to buy a TEP contract?

Thanks.

[Dennis Ng]

Hi all,

How to determine the price fo TEP? What is the minimum capital to buy a TEP contract?

Thanks.

it's a resale market. So as in most resale markets, Market forces of demand and supply would determine prices.

Minimum capital is about S$25,000, and minimum time frame is about 5 years or longer. One can even invest in Joint Names.

If you want to find out more on a no-obligation basis, just email to us at info@tradedEndowment.com providing your name and mobile number and I'll get one of my staff to contact you for a no-obligation discussion.

[Dennis Ng]

I spoke to one of my multi-millionaire sifus recently. This person has total wealth estimated probably close to S$200 million, much of his wealth made from investing into Properties (70%) and Stocks (30%). Recently, he bought some UK properties, the MAIN reason is becos of Sterling Pounds trading at historical low against S$, so he thinks there is not much downside.

When asked for his views on property market, he says:"you think can still buy property now meh?" I've sold most of my Singapore properties just bought some London properties since sterling pounds is at historical low and rental yield is quite good...and I borrow at slightly more than 1% interest rate and rental yield over 6%...

[jamestai]

Hi Dennis,

I have a few question regarding the TEP that I invested with your company.

1) How come so far I only get 1 accrued bonus statement from Prudential in 2010 only. Isn't that the insurance company has to send a statement to me every year ?
2) Also the Full Maturity Value of my policy that was show to me by your staff when I purchase policy, is that figure guarantee by the Insurance company ?
3) How did the insurance company come up with the terminal bonus of the policy ?
4) So far has any of your client that invested in TEP actually get back the Full Maturity Value that was promise to them when they invested ?

James Tai

[Dennis Ng]

Hi Dennis,

I have a few question regarding the TEP that I invested with your company.

1) How come so far I only get 1 accrued bonus statement from Prudential in 2010 only. Isn't that the insurance company has to send a statement to me every year ?
2) Also the Full Maturity Value of my policy that was show to me by your staff when I purchase policy, is that figure guarantee by the Insurance company ?
3) How did the insurance company come up with the terminal bonus of the policy ?
4) So far has any of your client that invested in TEP actually get back the Full Maturity Value that was promise to them when they invested ?

James Tai

Hi James,
for such questions, you should be calling us at 6338 2235 or email us at info@tradedendowment.com

Anyway, here's my reply:
1. not sure, yes, you should receive yearly. If you didn't receive, you can either check with Prudential UK directly yourself or you can ask us to help you check with Prudential UK (we can do this as a favour and customer service)

2. it's called Formula Maturity Value (FMV) which is based on the latest bonus rates declared by UK insurer in the year the Traded Endowment policy was purchased. The actual maturity value may be higher or lower than this FMV, actual Maturity Value depends on future performance and declaration of bonus by the UK Insurer (which can be min 5 years to maturity, or ahead into the future).

The above is clearly explained by our staff and also investors sign off acknowledging they have been informed about this in an Investor Declaration Form. The value is provided by UK Brokers based on the formula as stated (therefore it's called Formula Maturity Value). TEP Pte Ltd does NOT in anyway involve in calculating the FMV, we merely pass on the information.

The Cash Value of a policy is guaranteed Minimum Maturity Value (ie. maturity value can only be same or higher than Cash Value of a policy, which is adjusted upwards when additional bonus are declared). Cash value is guaranteed. In event of collapse of UK Insurer, 90% of the Cash Value is guaranteed by UK Financial Services Compensation Scheme, which was initiated by the UK government and authorities. Maturity Value of endowment policies are NOT guaranteed, not in UK, neither is it guaranteed in Singapore. (a widely known fact).

TEP Pte Ltd is like a property agent in the resale Property market. When you invest into a Traded Endowment Policy, it's similar to you buying a property from resale market instead of direct from the developer (UK Insurer). Your counter party is the UK insurer, we just help to facilitate in your purchase of the property (Traded Endowment Policy).

Your investment is NOT with TEP Pte Ltd, but invest through TEP Pte Ltd, your counter party is the UK Insurer, ie. you invested with the UK Insurer.

Only the developer (UK Insurer) determines the final product (Actual Maturity Value).

UK Traded Endowment is a highly regulated product in UK with close to 40 years history and as mentioned the 90% of the Cash Value of an endowment policy is even guaranteed by the UK Financial Services Compensation Scheme.

3. Each insurer determines terminal bonus rates themselves, there is NO fix rule, similar to in Singapore, depending on the insurer's performance, economic conditions etc, etc.

4. There are clients that get back maturity value even higher than FMV, some get lower.

I hope the above clarifies. If you have any specific questions on your investments, you can call TEP Pte Ltd at 6883 2235 or email us at info@tradedendowment.com providing your name and mobile number so that I can get one of my staff to assist.

[jamestai]

Hi Dennis,

Thanks for the clarification. So that mean there is still a risk that one can still lose money in TEP if the Maturity Value is much lower than expected when the Insurance company is not doing well. On top of that there is also currency exchange rate risk, if the Pound keep weakening against Singapore dollar when my policy mature. My concern is base on the 2009 bonus statement I receive from Prudential in 2010, I see the bonus value is very little and my policy maturity date is on 1 Nov 2015. This is the breakdown.

I paid a total premium of GBP 9281.50 with the exchange rate of $2.3015 in Nov 2009 for the policy I invested.
The calculated Full Maturity Value is estimated to be GBP 12288.
As on 1 April 2012 my total surrender value is GBP 8157.10 base on the letter i receive from Prudential UK.
And in 2010, Prudential send me a bonus statement which tell me my bonus in year 2009 is GBP 125.68

Using the bonus declared in 2009 as reference and I only left 4 yrs for my policy to mature, therefore the bonus I may get is estimated at GBP 125.68 * 4 = GBP 502.72.

Using the current surrender value in 2012, in 2015 my surrender is estimated to be at GBP 8157.10 + 502.72 = GBP 8659.82.

Therefore compare to the estimated Full Maturity Value for my policy, the different is GBP 12288 - GBP 8659.82 = GBP 3628.18.
So my doubts is can a Prudential UK pay me a terminal bonus estimated at GBP 3628.18 ?

James Tai

[Dennis Ng]

Hi Dennis,

Thanks for the clarification. So that mean there is still a risk that one can still lose money in TEP if the Maturity Value is much lower than expected when the Insurance company is not doing well. On top of that there is also currency exchange rate risk, if the Pound keep weakening against Singapore dollar when my policy mature. My concern is base on the 2009 bonus statement I receive from Prudential in 2010, I see the bonus value is very little and my policy maturity date is on 1 Nov 2015. This is the breakdown.

I paid a total premium of GBP 9281.50 with the exchange rate of $2.3015 in Nov 2009 for the policy I invested.
The calculated Full Maturity Value is estimated to be GBP 12288.
As on 1 April 2012 my total surrender value is GBP 8157.10 base on the letter i receive from Prudential UK.
And in 2010, Prudential send me a bonus statement which tell me my bonus in year 2009 is GBP 125.68

Using the bonus declared in 2009 as reference and I only left 4 yrs for my policy to mature, therefore the bonus I may get is estimated at GBP 125.68 * 4 = GBP 502.72.

Using the current surrender value in 2012, in 2015 my surrender is estimated to be at GBP 8157.10 + 502.72 = GBP 8659.82.

Therefore compare to the estimated Full Maturity Value for my policy, the different is GBP 12288 - GBP 8659.82 = GBP 3628.18.
So my doubts is can a Prudential UK pay me a terminal bonus estimated at GBP 3628.18 ?

James Tai

Hi James,

so it appears that you have received info from Prudential, which you claim you did not in the previous posting.

Points to note:
1. as mentioned, Cash Value is guaranteed, Maturity Value is NOT, whether for Singapore endowment policy or UK Endowment policy.
2. You cannot assume each year bonus is the same for next few years, it can be Higher, Lower in each year in the future till the policy mature (Not straight line).

Typically, UK Insurer structure their policies that a big portion of the bonus is given out as Terminal Bonus on the maturity date. This is to ensure that even if customers surrender their polices 1 to 2 years before maturity, they would lose out a great deal compared to holding on to maturity. Each year, UK Insurer will on their respective website shows their latest Maturity Value for endowment policies (Nope, such info is NOT provided by Singapore insurers, not as transparent as UK Insurers), so one can look at what they delivered so far to have some idea about their performance.

3. Similarly, you cannot assume the surrender value based on your estimation too. Actually, Surrender value is only relevant for people who surrender the policy to UK Insurer, which is typically a very low figure. This is why people rather sell their Endowment policies in the Secondary Market as Traded Endowment Policies, which would fetch a higher figure.

If you have any questions on your policy, as I said, you can either ask the UK Insurer (in this case Prudential directly yourself) or alternatively, we can help you to ask the UK Insurer as a favour and customer service.

4. why do Investors invest into UK Traded Endowment Policies? Personally, I invest mainly becos of the 90% Capital Guarantee provided in the Worst Case Scenario of Insurer collapsing.

Imagine in a Financial Crisis, many other investments would easily lose 50% to 90% of its value, yet for UK Traded Endowment Policies, I have this assurance and the peace of mind of a Minimum Guaranteed Value by UK Financial Services Compensation Scheme.

Another major advantage of investing into a UK Traded Endowment policy is that I "buy time". Instead of waiting 20 to 30 years for a policy to mature, I only need to wait minimum 5 years instead. And instead of starting with Zero Cash Value, I start with a minimum Guaranteed Cash Value.

I invest also as a form of diversification, putting my eggs into different baskets.

Investments denominated in another currency has its risks, but it does NOT necessarily mean that when policy mature, that Sterling Pounds would be less than S$2, does it? Is it possible for sterling pounds to be higher than S$2? (based on historical analysis, it is possible), this is something anyone can do their own homework on and verify the information.

All the major risks of investing into UK Traded Endowment have been explained to anyone who enquire about UK Traded Endowment before they decide to invest. In fact, we even come up with an Investor Declaration Form to ensure that none of my staff can choose to forget or not tell some of these risks to any Investors. We have listed them point by point in the Investor Declaration Form and the investor signed and acknowledged that these have been explained to them.

[lop]

Hi Dennis,

Thanks for the clarification. So that mean there is still a risk that one can still lose money in TEP if the Maturity Value is much lower than expected when the Insurance company is not doing well. On top of that there is also currency exchange rate risk, if the Pound keep weakening against Singapore dollar when my policy mature. My concern is base on the 2009 bonus statement I receive from Prudential in 2010, I see the bonus value is very little and my policy maturity date is on 1 Nov 2015. This is the breakdown.

I paid a total premium of GBP 9281.50 with the exchange rate of $2.3015 in Nov 2009 for the policy I invested.
The calculated Full Maturity Value is estimated to be GBP 12288.
As on 1 April 2012 my total surrender value is GBP 8157.10 base on the letter i receive from Prudential UK.
And in 2010, Prudential send me a bonus statement which tell me my bonus in year 2009 is GBP 125.68

Using the bonus declared in 2009 as reference and I only left 4 yrs for my policy to mature, therefore the bonus I may get is estimated at GBP 125.68 * 4 = GBP 502.72.

Using the current surrender value in 2012, in 2015 my surrender is estimated to be at GBP 8157.10 + 502.72 = GBP 8659.82.

Therefore compare to the estimated Full Maturity Value for my policy, the different is GBP 12288 - GBP 8659.82 = GBP 3628.18.
So my doubts is can a Prudential UK pay me a terminal bonus estimated at GBP 3628.18 ?

James Tai

Hi James,

so it appears that you have received info from Prudential, which you claim you did not in the previous posting.

Points to note:
1. as mentioned, Cash Value is guaranteed, Maturity Value is NOT, whether for Singapore endowment policy or UK Endowment policy.
2. You cannot assume each year bonus is the same for next few years, it can be Higher, Lower in each year in the future till the policy mature (Not straight line).

Typically, UK Insurer structure their policies that a big portion of the bonus is given out as Terminal Bonus on the maturity date. This is to ensure that even if customers surrender their polices 1 to 2 years before maturity, they would lose out a great deal compared to holding on to maturity. Each year, UK Insurer will on their respective website shows their latest Maturity Value for endowment policies (Nope, such info is NOT provided by Singapore insurers, not as transparent as UK Insurers), so one can look at what they delivered so far to have some idea about their performance.

3. Similarly, you cannot assume the surrender value based on your estimation too. Actually, Surrender value is only relevant for people who surrender the policy to UK Insurer, which is typically a very low figure. This is why people rather sell their Endowment policies in the Secondary Market as Traded Endowment Policies, which would fetch a higher figure.

If you have any questions on your policy, as I said, you can either ask the UK Insurer (in this case Prudential directly yourself) or alternatively, we can help you to ask the UK Insurer as a favour and customer service.

4. why do Investors invest into UK Traded Endowment Policies? Personally, I invest mainly becos of the 90% Capital Guarantee provided in the Worst Case Scenario of Insurer collapsing.

Imagine in a Financial Crisis, many other investments would easily lose 50% to 90% of its value, yet for UK Traded Endowment Policies, I have this assurance and the peace of mind of a Minimum Guaranteed Value by UK Financial Services Compensation Scheme.

Another major advantage of investing into a UK Traded Endowment policy is that I "buy time". Instead of waiting 20 to 30 years for a policy to mature, I only need to wait minimum 5 years instead. And instead of starting with Zero Cash Value, I start with a minimum Guaranteed Cash Value.

I invest also as a form of diversification, putting my eggs into different baskets.

Investments denominated in another currency has its risks, but it does NOT necessarily mean that when policy mature, that Sterling Pounds would be less than S$2, does it? Is it possible for sterling pounds to be higher than S$2? (based on historical analysis, it is possible), this is something anyone can do their own homework on and verify the information.

All the major risks of investing into UK Traded Endowment have been explained to anyone who enquire about UK Traded Endowment before they decide to invest. In fact, we even come up with an Investor Declaration Form to ensure that none of my staff can choose to forget or not tell some of these risks to any Investors. We have listed them point by point in the Investor Declaration Form and the investor signed and acknowledged that these have been explained to them.

Buyer beware! In summary, the 2 main risks discussed above for TEP are:
(1) Maturity Value is NOT guaranteed --> Just like other Endowment policy
(2) There is also currency exchange rate risk --> GBP has dropped from > SGD3 in 2007 to about SGD2 now

[danielcheng]

Hi James,

Let me put it this way. 3yrs ago in 2009, you viewed a Condo unit. The property agent mtkg the unit shared with you the Pros of this particular unit and also shared some of it's cons. After weighing, you decided to go for it. For the following 3yrs, you managed to rent it out at a 5% yield & just sold it recently for a 300% gain against the cash you put down as deposit. You can happily keep your profit or even call that property agent out for coffee to thanks his good recommendation or advise. It is a happy occassion, everyone is very forgiving & proud of the achievement!

Let's say today, you viewed a condo unit. The property agent mtkg the unit shared with you the Pros of this particular unit and also shared some of it's cons. After weighing, you decided to go for it. For the following 3yrs, you only manage to rent it out for a 1-3% yield & at times, quite hard to get tenant. On the 3rd year, you need to sell it and the market is against you. You finally sold it & lost of 100% of your down payment. I don't think it is a happy occassion although your property still has 80% of its purchased value. But you also shouldn't call that Property agent to question him why he recommended you the lousy property that cause you to lose money.

I guess that is the reality of life. Thats why it is always mentioned that everyone is responsible for the outcome of their own investment decision. When you make a 100% gain, you can decide to keep it or even share some % out. But if you Lose 100%, you can keep the 100% for yourself.

Hi Dennis,

Thanks for the clarification. So that mean there is still a risk that one can still lose money in TEP if the Maturity Value is much lower than expected when the Insurance company is not doing well. On top of that there is also currency exchange rate risk, if the Pound keep weakening against Singapore dollar when my policy mature. My concern is base on the 2009 bonus statement I receive from Prudential in 2010, I see the bonus value is very little and my policy maturity date is on 1 Nov 2015. This is the breakdown.

I paid a total premium of GBP 9281.50 with the exchange rate of $2.3015 in Nov 2009 for the policy I invested.
The calculated Full Maturity Value is estimated to be GBP 12288.
As on 1 April 2012 my total surrender value is GBP 8157.10 base on the letter i receive from Prudential UK.
And in 2010, Prudential send me a bonus statement which tell me my bonus in year 2009 is GBP 125.68

Using the bonus declared in 2009 as reference and I only left 4 yrs for my policy to mature, therefore the bonus I may get is estimated at GBP 125.68 * 4 = GBP 502.72.

Using the current surrender value in 2012, in 2015 my surrender is estimated to be at GBP 8157.10 + 502.72 = GBP 8659.82.

Therefore compare to the estimated Full Maturity Value for my policy, the different is GBP 12288 - GBP 8659.82 = GBP 3628.18.
So my doubts is can a Prudential UK pay me a terminal bonus estimated at GBP 3628.18 ?

James Tai

[jamestai]

Hi Lop,

I agreed with you, we as buyer/investor has to be aware that even product like TEP also has the risk that you might lose money in it.

Dennis, I need to correct your understanding on your statement :

"so it appears that you have received info from Prudential, which you claim you did not in the previous posting."

Please re-read what I say in my previous posts. I say I have not receive any of the yearly accrued interest statement since 2011 onwards from Prudential UK. So far the only accrued interest statement that I receive from Prudential UK is for 2009. Only when I ask your staff, Joan 2 months ago, why I have not receive any accrued interest for 2010 and 2011, she told me she don't know but will try to find out for me from Prudential UK. The next thing I know is that I receive a letter from Prudential UK telling me to sign a Surrender document if I want to surrender my policy. I have not instructed any of your staff or Prudential UK that I intent to surrender my policy, I have no ideas why Prudential send me such document. However in that document, it tell me what is my policy surrender value as on 1st April 2012.

Since Joan and you unable to tell me what would be final Terminal bonus that Prudential UK will give me when my policy mature, I can only base on the data I have so far to calculate the best estimate what I would get back when my policy mature. And I am very concern that not only I am not getting back the Final Maturity Value that was present to me, I might be getting even lesser than what I have invested when the policy mature.

You don't have to remind us of the Risk declaration form that we need to sign when we invest in your company TEP product. I understand you are telling me here at the end of the day if I lose money don't come to complaint to you.

I am raising my concern here that there is a chance I am losing money in my investment of TEP policy which I bought through your company. I am sure many of us here would like to understand the risk of TEP. Especially for those who invested around the same time in 2009 when the exchange rate between Sterling pound against Singapore dollar is very high. I think your company are still the only Singapore company authorize by MAS to sell TEP products and you are the link between your customer and all the UK broker and insurance company that sell us TEP products. Can you please help me to find out what would be the worst case scenario of Final Maturity Value that I would get back ?

I have no problem to share information on my TEP product that I invested with everybody here. In fact I think it would be beneficial for everybody here to understand really how the whole TEP investment work and how your company can help us. Please use my case as an example here and explain to me what are the chances I am going to profit on this policy and if it is going to be a loss, what are the option I have to cut my losses ?

Thank you.

James Tai

Buyer beware! In summary, the 2 main risks discussed above for TEP are:
(1) Maturity Value is NOT guaranteed --> Just like other Endowment policy
(2) There is also currency exchange rate risk --> GBP has dropped from > SGD3 in 2007 to about SGD2 now

[Dennis Ng]

Buyer beware! In summary, the 2 main risks discussed above for TEP are:
(1) Maturity Value is NOT guaranteed --> Just like other Endowment policy
(2) There is also currency exchange rate risk --> GBP has dropped from > SGD3 in 2007 to about SGD2 now

Hi Lop and everyone else,

do any of you know of any investments that :

1. has Guaranteed Returns
2. Not in foreign currency
3. 5 years investment time frame

with returns of more than 3% a year?

If you know, please share, as I'll be interested to invest.

To me, UK Traded Endowment the main attraction is the Downside Protection.

Which investment can give you 90% guarantee on Cash Value in the worst case scenario of the collapse of a Financial institution?

I cannot think of any.

[Dennis Ng]

Please use my case as an example here and explain to me what are the chances I am going to profit on this policy and if it is going to be a loss, what are the option I have to cut my losses ?

Can you please help me to find out what would be the worst case scenario of Final Maturity Value that I would get back ?

James Tai

I'm not sure why are you angry for? What have I done to cause this emotional outburst from you. You asked questions and I answered all of them.

TEP Pte Ltd does NOT in anyway control or influence the final maturity value. Your investment is with the UK Insurer, through us, your investment is NOT with us, this I already explained in my previous reply.

If you want to ask anything about your endowment policy, you can either ask Prudential directly or as I said, we can help you to ask your questions to Prudential. Only Prudential can answer those questions you ask on the estimated maturity value.

If you want to, without waiting for final maturity, you can either surrender your policy (Not worth doing, since what you get is typically very low, this is why people in UK choose to sell their policies in the Traded Endowment market instead of surrendering). Or you can choose to sell your policy in the Traded Endowment Market (Secondary Market for endowment policies), this you can either try to do it yourself, or we can help you to do.

The worst case scenario is that a UK Insurer gives Zero Bonus for all the years until maturity date, (min years to maturity is about 5 years), so in this worst case scenario, the Final Maturity Value equals the Cash Value. That's why the Cash Value is indicated as the Minimum Guaranteed Maturity Value.

And the really worst case scenario is the UK Insurer collapse, and in this case, you would get back 90% of the Cash Value.

What's the worst case scenario for many other investments? Zero.