WHY do individuals surrender their insurance policies and HOW can they get a higher surrender value?

Today’s article will touch on why two individuals decided to surrender their insurance policy and how they manage to extract a higher value from their policies through fidentiaX.

Here are the two actual scenarios of policyholders who sold their policies to fidentiaX:

  • Tim owned a Single Premium endowment policy that was set to mature next year. However, Tim was to relocate overseas for work and will not be back in Singapore in the long term. Hence, he decided to surrender his endowment plan before the policy maturity date. He approached his insurance agent as well as his insurer to surrender his policy but was unhappy with the surrender value offered to him.
  • Jason owned a regular premium endowment policy. Unfortunately, Jason was recently retrenched and was not able to continue his monthly premiums for his endowment plan. Jason wanted to surrender his policy to have some cash to tide him through this period. His policy was in the initial years and the surrender value was less than 20% of his premiums paid. Similar to Tim, Jason approached his insurance agent and insurer and was disappointed with the surrender value.

Subsequently, both sellers chose to sell their policy to fidentiaX as the offer price was higher than the surrender value given by their insurers.

The surrender value offered by the insurers is based on the amount of premiums paid till date. However, the pricing engine developed by fidentiaX, calculates recommended selling price based on estimated maturity value. This approach helps fidentiaX offer a fair share of investment income (to be earned in future) to be passed on to the seller. The pricing engine, based on sound actuarial techniques, always results in recommended surrender value being higher than the surrender value offered by the insurers.

“fidentiaX provides prompt and efficient service and the representative from fidentiaX took pride in providing detail explanations on the procedures. Competitive rates in terms of valuation.” — Jason

Though the fidentiaX marketplace is only set to go live later this year, the team has been actively reviewing and taking over insurance policies from individuals. The reason is simply to become a future liquidity provider for our marketplace and to demonstrate the advantages of having a portfolio of tradable policies.

When the marketplace goes live, fidentiaX will provide a real-time calculator based on actuarial calculations to recommend a fair “selling” price to policy holders looking to surrender their policy. Buyers and sellers will then be able to use the tools provided by fidentiaX to make an informed decision and trade with each other on the marketplace.

Why Should You Sell Your Policies on the fidentiaX Marketplace ?

  • Secure Platform: fidentaX is a blockchain powered marketplace that offers you a safe, fixed, reliable, and trusted environment to sell your policies.
  • Transparent Process: We follow an auditable and transparent procedure through which our existing policies are effectively digitialised on to the blockchain platform.
  • Has Efficient Quotations: With the real-time pricing enginebased on actuarial techniques, users can get an efficient and fair quotation on their policies.

There is no denying the fact that having a holistic portfolio, which includes financial planning, are important aspects for an individual. Unfortunately, as life changes there can be circumstances in which a policy holder has to surrender their policy.

The fidentiaX team is passionate about building a platform that gives policy holders an alternative solution instead of surrendering their policies back to their insurer.