Who we are - PolicyXchange

General FAQ

1. What is PolicyXchange?

We are a digital marketplace that connects parties who are interested in buying existing Endowment and Whole Life policies from policy owner or selling their existing Endowment and Whole Life policies.

2. Is the sale of policies to a third party permitted or legal?

Yes. You may find out more information here¹.

(1) - These are links to third party websites that are not affiliated or related to PolicyXchange and PolicyXchange is not responsible for and does not guarantee or endorse the content on such websites.

3. What policies can be sold / bought on PolicyXchange?

Existing Endowment or Whole Life Participating policies that meet all 3 criteria below:

(i) issued by Singapore life insurance companies;
(ii) still in force; and
(iii) purchased by cash only. Policies paid with CPF monies or from SRS accounts are not eligible for buying or selling on PolicyXchange.

4. Is an insurable interest required to buy or sell a “pre-owned” policy?

No, this is not required for buying or selling “pre-owned” policies.

5. What are the costs of buying or selling on PolicyXchange?

Yes. We charge a platform fee for successful buying or selling.

6. Does PolicyXchange buy or sell policies?

No. PolicyXchange does not buy or sell any policies.

7. Does PolicyXchange provide financial advice to buy or sell policies?

No. PolicyXchange does not provide any financial advice or recommendations in relation to the decision to buying or selling of policies.

8. Is PolicyXchange an insurance company or a regulated entity?

No. PolicyXchange is not an insurance company or an entity regulated by the Monetary Authority of Singapore (MAS).

Currently, the sale, purchase and distribution of Traded Endowment Policies (TEP) or Traded Life Policies (TLP) is also not regulated or governed.

Our Process

: Sellers
Step 1: Account Registration
Step 2: Provide Policy Information; Input of key policy information, and upload supporting documents; Please note that PolicyXchange does not screen the documents that are uploaded
Step 3: Submit the listing
Step 4: Sale Completion; Chat directly to agree on signing and payment method

: Buyers
Step 1: Account Registration
Step 2: Browse our listings
Step 3: Make an Offer; Make an offer on a listing that you’re interested in
Step 4: Sale Completion; Chat directly to agree on signing and payment method

Facilitators

1. Can I sell on behalf of a policyholder?

Yes. You will need to obtain all necesary consents from the policy holder whom you are submitting the listing on behalf of.

2. What do I need to list a policy for sale?

You will need to submit:

(i) information relating to the policy; and
(ii) digital copies of the supporting documents (such as post-sales illustrations).

Please also get all necessary consents from the Policyholder(s).

Please redact personal information/data from any pages with such information of the Policyholder before uploading.

4. Can I sell policies that have oustanding loans?

Yes. You may list a policy that still has outstanding loans.

5. I have uploaded the policy documents. How long do I need to wait?

Buyers may take between of 3-5 working days to make an offer upon receiving all the necessary information.

6. Can I make changes to the policy information provided after listing?

Yes. However, as the quotes are based on policy information submitted by you, any changes to information provided may impact quotes that you have already received.

7. Is the offer from the buyers binding and final? Can the buyer change the price at any time during the process?

The offer from the buyers is based on the information supplied by you.

The surrender value provided by the insurance company may fluctuate before the transaction date.

If any information provided is incorrect or has changed significantly, buyers have the right to revise the offer price or not proceed with an offer.

8. The Policyholder(s) have agreed to sell the policy. How is the transfer done?

The transfer is done by way of an assignment.

The Policyholder will need to complete a prescribed form provided by the insurance company and complete the assignment process at the customer service of the insurance company.

9. How are payments processed?

PolicyXchange does not govern or regulate its users or facilitate payment settlement.

Buyers may make payment via cash, cheque or any other method. As each buyer has their own settlement terms, please contact the buyer directly on the actual settlement terms.

10. Can I deal directly with the buyers?

PolicyXchange allows you to deal directly with multiple buyers on one platform.

Buying or selling of any policies are still done directly between buyers and sellers.

11. Will I get a better price if I deal with the buyers directly?

At this moment, PolicyXchange does not charge any fees that may impact offers from the buyers.

We highly encourage you to try PolicyXchange as it is more convenient than having to connect with multiple individuals directly.

12. Can I remove the listing if the Policyholder no longer wishes to sell?

Yes, you can. Once you remove the listing, existing offers will be notified.

Policyholders

1. What are some reasons why Policyholder(s) surrender their policies?

Below are some reasons why Policyholders surrender their policies:

restructuring of insurance portfolio (i.e. redirecting committed financial resources to purchase term covers)

the policy no longer serves their needs

to realise the policy cash value to fund investment or business opportunities

changes in financial circumstances (eg. where they are unable to pay the premiums)

2. Why would buyers want to buy insurance policies?

Investors are interested in buying as they can take over insurance policies at reduced term to maturity as well as receive an enhanced yield at maturity.

Investors could also be purchasing policies for their own investment or to resell it to other investors.

3. What are the risks of selling policies prior to maturity?

Surrendering or selling policies prior to maturity may result in financial losses.

For example, the surrender value receivable from the insurance company or the value from the sale of the policy may be less than the premiums that was paid for such policy.

PolicyXchange strongly encourages Policyholders to seek professional advice on the risks of selling policies prior to maturity.

4. How can I find out more about Traded Endowment Policies and Traded Life Policies (TEP/TLP) the associated risks?

You may wish to refer to the following publications and websites¹ on TEP/TLP below.

Traded Life Policies and Traded Endowment Polices (MoneySENSE.gov)

Distribution of Traded Endowment Policies to Retail Investors Allowed (Monetary Authority of Singapore)

MAS invites comments on draft regulations for Traded Endowment and Traded life policies (Monetary Authority of Singapore)

5. What is the benefit of selling the policy to Investors vis-à-vis surrendering it with the insurance company?

Investors are willing to buy over at a reduced term to maturity and enhanced yield at maturity.

Such investors may be able to pay Policyholders more than the surrender values given by the insurance company. Generally, Policyholders may see between 3% - 10% more than the surrender value of the policy.

6. What happens if the policy documents are missing?

Please obtain a replacement from the insurance company. Do note that the insurance company may charge a replacement fee.

7. What happens to the policy after completion of the sale?

The policy will be transferred to the name of the buyer.

The original Policyholder no longer has to pay premiums and no longer has rights under the policy.

8. What happens to the death benefits?

The buyer, as the new policyholder, will have all rights to the policy including the death benefits subject to meeting the insurance company’s claims requirement.

9. What happens to the beneficiaries under the policy after the sale?

Once the policy has been sold and effectively transferred, any beneficiaries under the existing policy will no longer be entitled to proceeds.

The buyer, as the new policyholder, will have all rights to the benefits under the policy.

10. Will the Policyholder’s personal details stated in the policy continue to be available to the buyer?

Yes. The policy contract, which contains all Policyholder’s personal details, will be transferred to the buyer.

11. What happens if a premium is deducted from the Policyholder’s bank account after the assignment?

Please contact the insurance company to correct any erroneous deductions.

Investors

1. Why buy a "pre-owned" policy?

As an investor of a "pre-owned" policy, you may benefit from a reduced term to maturity and enhanced yield at maturity.

2. What are the risks associated with buying Traded Endowment Policies and Traded Life Policies (TEP/TLP)?

Some of the risks (if applicable) associated with buying TEP/TLP are:

Life Extension Risk: It is difficult to accurately predict life expectancies. An inherent risk particularly associated with investing in TLPs and TEPs is “life extension risk”. This is the risk of the insured person outliving the indicated life expectancy. When this happens, investors will have to pay the premiums for longer than expected to finance the policy. As a result, the returns to the investor are reduced or may even be negative.

Legal Risks: The TLP and TEP products that are currently distributed to local investors are generally policies acquired overseas. This makes it difficult for local investors to assess the quality of TLP and TEP products sold. Should any grievance or conflict arise, investors would need to enforce their contracts against life insurance companies located overseas and deal with the legal system of that overseas jurisdiction. Investors may therefore face significant difficulties enforcing their rights. This is because the legal system of the overseas jurisdiction may differ from that of Singapore's.

Liquidity Risk: As life expectancies are difficult to predict, investors may need to commit their investment funds for considerable periods of time, in some cases, 10 years or more. Investors may find it difficult to re-sell the policies they have purchased.

Credit Risk: If the life insurance company becomes insolvent, investors are exposed to the credit risk of the life insurance company which issued the underlying life or endowment policy.

Foreign Exchange Risk: The benefits from the policy may be paid in a foreign currency. Investors may have to bear the exchange rate risks of converting these benefits into the local currency.

Other Risks: A higher incidence of fraud has been associated with the sale of TLPs and TEPs in countries where these products have been sold for some time. Investors risk losing their principal investment amount if life insurance companies deem a policy null or void due to fraud or other reasons. Social and ethical concerns have also been raised as the investment returns on such products are inversely linked to the life expectancies of the insured persons.

(Information above extract from MoneySENSE. Please refer to their website for more information.¹)

PolicyXchange strongly encourages Investors to seek professional advice on the risks of buying TEP/TLP.

3. How do I buy a policy through PolicyXchange?

Please click here to see the process of buying through PolicyXchange.

4. Is the offer that I made to the seller binding and final? Can I change the price at any time during the process?

Your offer price is based on the policy information provided to you.

If any information provided is incorrect or has changed significantly, you have the right to revise the offer price or withdraw the offer to the sellers.

5. Can I reassign the "pre-owned" policy I bought?

Yes. Once you are the policyholder, you have the right to transfer the policy to another party by way of assignment.

There is no limit to the number of such assignments.