I walk around Raffles Place rather frequently due to work. Once in a while, I will see a guy similar to the one in the picture below standing at Prudential Tower wearing a huge sign on his back. The message is usually along the lines of surrendering insurance and higher payouts.

repsholdings

So, one of these days, he handed me little brochure which point me to this company named REPS Holdings (Facebook).

Basically, what happens is that instead of surrendering your policy (savings/endowment/etc) to the insurance company you bought it from for really low returns, they will buy it from you. They will continue to pay premiums on it till maturity, and collect the payout. You gain by getting a higher payout. REPS Holdings gain by profiting from the payout at policy maturity.

First thought was, wow. What an awesome place to be putting this guy, huh? Just right outside Prudential!

Would I Use It?

Guess it really depends on the situation huh?

Personally, I have a policy that was purchased by my parents donkey years ago. Of course, I have taken over the paying of premiums for this policy. The problem is that it has been getting really low returns (or no returns, haha). The annual reports were by the company were really depressing. Projections done in the past were really optimistic and rosy, pui.

Although the amount of “protection” provided by the policy is crap (my other policy easily provides 4 times as much coverage at lower cost – buy term and invest the rest), it makes no sense to surrender it now. Right now, I have about 2 years to go before it reaches the 20-year threshold when I’d get back a tidy sum of money. Just endure another 2 years and I would have a mini-warchest to deploy for index investments. Tahan!

If you are one of those who got slapped with a bad policy that you didn’t buy, perhaps you can consider this option by REPS Holdings.

Reading Materials

Business Times – Market For Resale Endowment Policies Emerging
The Finance – Myth On Endowment Policy Returns
MoneySENSE – Traded Life Policies

REPS Holdings Q&A

Q&A Provided by Derek from The Finance

 

More Than Index Investing

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