Reasons to acknowledge Holding Your Portfolio in tradable policy marketplace - Jinz Haiggh Blog

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Reasons to acknowledge Holding Your Portfolio in tradable policy marketplace

Tradable life insurance policies which majorly include endowment, whole life, universal life, key-man, and investment-linked insurance are the insurance policies that can be sold by the policyholders. They are sold  to the third-party purchasers in tradable policy marketplace​ who  want to gain investment exposure in their investment portfolio.

Most life insurance policyholders have no idea that their policy is an investment asset that can be easily sold to third-party buyers when they want to access their policy’s cash value than merely handing over their policy back to the insurer.

Currently there exists a very illiquid market for tradable policy marketplace, making it difficult to access and use various middlemen in the process of buying and selling policies . Hence, developing an tempting market for investors for this asset class is not possible.

Though it's time to turn tables most startups are developing the world’s first tradable policy marketplace​ for tradable life insurance policies. This newly created platform will provide a single platform to policyholders and insurance policy buyers where they can deal in a crystal clear, user-friendly and trustless trading environment.

In addition to enabling life insurance policyholders to sell their policies for comparatively higher cash value to third-party buyers than handing them over, it will also draw attention of investment managers, corporations, and private investors who want to acquire exposure to this interesting options of asset class.

The most remarkable characteristic of this asset class includes capital preservation, stable returns, a fixed tenure, comparatively higher returns than other asset class, and zero correlation to stocks and bonds, etc.
  • Capital Preservation
Guaranteed and declared returns  by the insurance company are incorporated in the cash value of a life insurance policy.  OR we can say , the cash value of a life insurance policy is excellently preserved and backed by the insurance provider in tradable policy marketplace​.

Conservative investors who place a lot of weight on capital preservation, tradable life insurance policies is an interesting offer as the policy’s cash value effectively comes with a capital guarantee.

 Moreover, there there a highly regulated industry for insurance companies, which means they have to meet stringent capital reserve needs because of this reason they are also termed financially robust firms.
  • Substantial Returns
Negotiable life insurance policies provides buyers Substantial returns with a low fickle comparable asset classes. The core reason for this is that insurance companies have the inclination not to proclaim all revenue earned in a sound financial year so that they can set aside undistributed returns as a reserve. These reserves are then distributed in bad years to smoothly carry out the performance of the insurance companies funds.
  • A Fixed Tenure
For portfolio managers who have maturity issues for their investments, tradable life insurance offer an excellent option to bonds as they usually come with a fixed maturity date. This makes the asset class perfect for portfolio planning and cash flow management in tradable policy marketplace​.
  • Potentially Higher Returns Than Comparable Assets
A study that compared existing real-world fixed income portfolios with a model portfolio composed of tradable life insurance policies incorporating endowment and universal life summed up that insurance policies would perform better than other similar risk class portfolios.

Tradable life insurance policies can, not only act as a capital preservation asset class but also as a enhances the performance of a portfolio.
  • Immunity against Insurance Set Up Costs
Investor directly gets immunity against setting up costs of a new policy by buying an insurance policy from a policyholder rather than buying one from an insurer directly because this cost has been already been covered by the previous policyholder. The structure life insurance policies are such that, set up costs such as the underwriting fee and commissions payable to agents are deduced in the first few of years of the policy. This can make it more lucrative for purchasers to buy these policies in the negotiable insurance policies market.

The above-mentioned reasons are why there is an ongoing interest from corporations, investors, and private individuals in the tradable life insurance market. In times where financial tradable policy marketplace​ there is is a problem with uncertain geographical boundary and largely driven by central bank monetary easing, tradable life insurance policies offer an increasingly attractive alternative to stocks, bonds, and commodities.
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