FREQUENTLY ASKED QUESTIONS

What are traded policies?

Traded policies, also called second-hand policies, offers an alternative to the early surrender of investments or policies as these financial instruments often have a higher intrinsic value than the surrender value offered by insurance companies. All restricted policies are tradable and this is the only way to access the restricted value of your policy.

What kinds of policies and investment can be traded?

Clients should refer any policy or investment to be surrendered for a valuation to ensure they make an informed decision. Below follows a broad outline of financial products that are tradable. However, bear in mind that not all policies matching those listed will be tradable.

• Single-premium investments: Any single-premium investment contract with term remaining to maturity.
• Smooth Bonus Portfolio policies: These are issued by all the large insurance companies.
• All Guaranteed Growth and Income plans: Endowment policies with term to run to maturity date.
• Voluntary/Optional term annuities: There will be a capital gain if a term annuity is surrendered after a decrease in interest rates. This annuity can therefore be sold at a price if capital is required.
• All insurance Policies and Investments in a Restricted Period: During the first 5 years the policyholder is restricted to one loan and one part-surrender or one loan and a full surrender. (A policy also becomes restricted for 5 years as soon as both these events occurred within a 5-year period.) The solution to this scenario is to trade such policies as they may not be surrendered. The policyholder is able to access the remainder of the investment without having to wait the remainder of the restriction period. (Polinvest’s trading quotes can be compared to financiers providing loans against policies.)
• Tranche products: Policies that cannot be surrendered during the initial first 5 years — both rand hedge and offshore portfolios.

Which financial products cannot be traded?

The following financial products are not tradable:

• Retirement annuities
• Life policies with the exception of reversionary bonus / conventional policies (issued prior to 1987)
• Deferred compensation
• Matured endowments
• Hospital or medical plan products
• Funeral policies
• Unitized policies unless there are penalties involved at early surrender
• Term insurance.

How can I calculate the available value of a policy?

The surrender value is normally issued by the relevant insurance company. The available value of an endowment policy is usually restricted to a maximum of premium contributions to date plus 5% per annum. This is often less than the actual policy value at that point.

In terms of legislation, one loan and one withdrawal are permitted during the first five years. The sum of these may not exceed the contribution plus 5% p.a. compound interest.

How does the trading process work?

Polinvest has designed a step-by-step approach to trading to keep all relevant parties informed of every stage of the process. See the overview of the trading process.

Why analyse my financial portfolio?

• Restructuring your portfolio to reduce debt and/or free up cash flow
  
• Trading of your investments or policies
  
• Restricted policies and investments — loan versus selling comparisons
  
• Adjusting or increasing your investments and risk protection for added peace of mind
.

Portfolio summaries will only be dispatched on completion and only after receiving your written request for portfolio evaluation.

Click here to see an example of a restructured insurance portfolio to see how restructuring your portfolio can benefit you
Click here to see fundamental facts, legislation and reasons for trading