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Endowment selling is the selling of an endowment policy to a third party instead of surrendering it to the original life assurance company. This is often done in an attempt to gain more money than the value given when surrendering.
Contract to a new life insurance policy via the 1035 exchange privilege will render the newly issued contract as Modified Endowment Contract as well. This change to the law put an end to the widespread sale of traditional endowment policies in the United States such as Endowment at Age 65, Ten-Pay Endowment, Twenty-Pay Endowment, etc.
This type of arrangement is called an investment-backed mortgage or is often related to the type of plan used: endowment mortgage if an endowment policy is used, similarly a personal equity plan (PEP) mortgage, Individual Savings Account (ISA) mortgage or pension mortgage. Historically, investment-backed mortgages offered various tax advantages ...
The underlying premise with endowment policies being used to repay a mortgage, is that the premiums plus growth of the investment will be adequate to repay the loan when it falls due. Toward the end of the 1980s when endowment mortgage selling was at its peak, the anticipated growth rate for endowments policies was high (7-12% per annum).
Such a sale provides the policy owner with a lump sum. [4] The third party becomes the new owner of the policy, pays the monthly premiums, and receives the full benefit of the policy when the insured dies. [4] In many jurisdictions, a viatical is a life settlement where the insured has less than two-year life expectancy.
New year, same old real estate market: The high mortgage rates, scarce inventory and dismal affordability that have plagued housing look set to linger. NBC Universal 1 month ago The housing market ...
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