For any life insurance policy, it is sold by a financial advisor or a bank.
There are distribution costs involved like commissions. These costs exist in the initial years.
Typically the policy will start to accumulate some value on or after the third year.
For endowment policy with a tenure, the waiting period for maturity will be shortened for the new owner,
as the former policyholder has paid and unable to wait for maturity, therefore have to give up prematurely.
You as a buyer, by taking over an existing policy, do not have to wait as long for the original policyholder.
As the new policy owner, it is your obligation to continue paying the premium.
Otherwise it will go into an automatic policy loan mode (future premium will be loaned against the value of the policy).
You can decide to terminate the policy as and when you wish to.
To obtain the full maturity value, you have to continue paying premium until the end of the tenure or the desired investment target has been met.
Individual insurance company's life insurance policies are based on the performance of its respective life fund performance.
Like in all other forms of investments, future performance of the life funds are not guaranteed and are subjected to market performance
in the several different asset classes like properties, equities, bonds and also the operating expenses.
In most cases, potential yields are above bank saving interest rates and fixed deposit interest rates.
In fact, life insurance policies like whole life and endowment plans are suitable for assignment or "for sale". Whole life and endowment policies are easy to identify as they receive bonuses each year from the life insurance company. If you are unsure whether your policy qualifies, please write in to us at firstname.lastname@example.org.
The amount varies depending on the type of policy being assigned,the underlying cash value and life insurance company the policy is held with. It is a good practice to try to get a higher price if you are able to wait for a better offer. If there is an urgent need, a good offer is better than no offer.
The policy is transferred from the assignor (the original policyholder) into the name of new policyholder(assignee), however the life assured is the named person. The new policyholder(assignee) will continue to pay the premium until maturity for an endowment or at the time the policyholder wishes to terminate the policy.
If the original policy documentation has been misplaced or lost, the policy holder needs to make a visit to the insurance company to complete a Lost Policy Declaration form. There will be a cost to obtain replacement policy documents. These days, if your insurance company has a web portal, you do not need to have the policy document, you just need to do it login to the respective insurance companies' websites to look at your policy details.