The latest offerings, from niche financial service provider Life Insurance Policy Exchange Limited, differ in that they allow owners of whole of life and endowment life insurance policies to access funds from their policies prior to maturity - without fully exiting the policy.

With many policyowners looking to supplement income now they’re close to or in retirement, advisers who manage registers of these policy types are welcoming the new exit options.

Up till now accessing funds from a policy using the secondary market has been limited to the complete sell down of the policy, with some owners reluctant to conduct an early cash in of an asset they will have spent years building. The new options allow the policyowner to retain a portion of their policy at the same time as releasing funds, through a partial sell down. It represents a shift in how these life insurance assets can be managed.

“Over the 20 years we’ve provided an alternative cash out option for policyowners wishing to exit their policy, we’ve seen an increasing number of policyowners needing to supplement retirement income,” says Greg Donnison, founder and Managing Director of Policy Exchange.

“Our new options provide more choice, and policyowners appreciate being able to continue participating in an asset they’ve worked hard to build up”.
There is flexibility in how much of the policy is retained and how much is used to access funds, plus the choice to either receive funds as lump sums or reinvest to receive regular payments spread over time.

This enables policyowners to tailor outcomes to suit their unique needs.