Do You Know What Types of Insurance Policies Can be Sold?
Commonly, Funds and life policy as they are can be sold assignable.
Insurance savings schemes are also called endowment policies. A customer usually pays a monthly or annual fixed sum until the policy matures (specifically when the policy ends).
In the policyholder’s maturity, if the policyholder outlives the maturity date, he/she will get back the assured sum of money, also recognized as the maturity benefit. If the policyholder passes away ere the policy matures, they will give coverage for his/her dependents.
On the other hand, in whole life policies, the policyholder shall be covered after the death, typically in the form of fixed payments, by the policyholder’s dependents.
They presumably told you to buy insurance policies, but do you know that you can also sell insurance policies?
Reasonably, certain situations that arise may cause you to consider cancelling your insurance policy.
For example, you may need cash urgently and can no longer sustain the policy.
Other times, circumstances such as reduction or divorce may be the reasons why you may require to give up your policy so that you may split your assets & re-plan your finances, respectively.
Another instance is that your policy has reached a break-even point (specifically, cash value of policy = premiums paid). Thus you wish to terminate it. This is particularly if the insurance coverage does not seem to be as acceptable anymore.
To terminate or discontinue your insurance policy, you usually have two options:
- Surrender your policy; or
- Sell your policy.
This article will talk about the sale of insurance policies in Singapore. To learn more about business loan, contact us.
What Would Happen When I Sell My Insurance Policy?
When you sell your insurance policy, this policy is being given to a third party who will then take over your duties (e.g., continue to pay the future monthly premiums).
These third parties can either be the vendor/broker you sell your insurance policy to (e.g., marketplaces that buy or sell insurance policies) or a party sourced by the vendor.
In exchange, you get financial benefits according to the valuation of the insurance policy at that point in time of selling it (specifically, the policy’s current value).
If you decide if your policy will be sold or not, these factors should be kept in mind:
Pros | Cons |
---|---|
You get paid more value than surrendering your insurance policy. | You will miss the insurance coverage once the policy is sold. |
You will get an upfront payment (either in cash or cheque). | If the policy you are selling is a life policy, a third party may benefit upon your death. |
The selling process is relatively fast and straightforward to complete. | The selling of insurance policies is not regulated by the Monetary Authority of Singapore (MAS). |
How Old Does the Insurance Policy Have to Be Before I Can Sell It?
If you have held the policy for at least 1/3 of its duration, third-party vendors may be interested in buying these policies. Though, the vendor may be willing to take over a newer approach if it is:
- Limited pay (e.g., the premium payments are front-loaded to the first five (5) to ten (10) years of the policy’s life, for a 20-year policy)
- Single premium (i.e., the premium payment was made in a lump-sum at inception)
Can I Still Sell My Insurance Policy If I Had Missed Out On Premium Payments?
Whether you can still sell your insurance policy if you had missed out on premium payments would depend mainly on the extent to which you had defaulted on these payments, such as the length of the period of default and the amount overdue.
The insurance policies usually take up to thirty (30) days to make payments missed from the last due date. The insurance company that terminates your policy is likely not to make payments by the end of the grace period.
When your policy is terminated correctly, then you can no longer sell your policy.
However, suppose your policy has enough cash value for an Automatic Premium Loan (taken by the insurer against the cash value). In that case, your policy will still be in force & not terminated. In this case, it may still be likely to sell your policy for insurance.
It will probably not be possible to pay the premium considered when the third-party vendor makes a valuation of your policy (specifically, you will likely get a lower amount).
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FR Capital Policies vs. Singapore Fixed Deposit Rates
Many invest in bank fixed deposits & treat them as the most secure place to store their savings. Though, fixed deposits should primarily be viewed as a place to store money to preserve the capital rather than a means to create long-term wealth. Fixed deposits suit ultra-conservative investors as they do not settle for anything other than fixed and guaranteed returns with high safety.
Though ultra-conservative investors should look at trade insurance policies that give you higher returns and policies are also backed by SDIC in the event of default of insurers. Read more on the SDIC website.
Effective date, March 2020
FR Capital Policies vs. Singapore Fixed Deposit Rates

12 mths | 18 mths | 24 mths | 36 mths | 48 mths | 60 mths | |
---|---|---|---|---|---|---|
Cash Deposit Over $20K (% p.a.) | 1.40% | 1.40% | 1.40% | 1.40% | 1.40% | 1.40% |
FR Capital Traded Policies (% p.a.) | 2.50% | 2.50% | 2.50% | 3.00% | 3.30% | 3.50% |
Are you selling your insurance? We’ve made selling your insurance as simple as possible.
While your initial thought on the process of selling your insurance policy may be to head down to your insurance company, this is needed only later on in the process.
Alternatively, you should first obtain a valuation that you are content with by approaching one or more third-party vendor(s).
The following outlines the course of selling an insurance policy:
- Source: Find a suitable & trustworthy third-party vendor in the market.
- Valuation: Send in the relevant information needed by the vendor for valuation. The insurance policy itself is the essential piece of document required for valuation. It should add information such as the start and maturity date, sum assured premiums, and surrender value (see below). Vendors usually offer the valuation for free.
- Review offer: The salesperson will return to you on their request. You can decide to continue selling at this point.
- Transfer: You can complete the transfer of policy ownership in 30 minutes at the Insurance company. Once this is finished, you will no longer have any outstanding obligations under the policy.
- Payment: Depending on the vendor, you will earn upfront payment either in cash or cheque.
What Are The Alternatives to Selling My Insurance Policy?
Surrendering my insurance policy
As mentioned beforehand, if you are looking to end your insurance policy, the alternative to selling it is to surrender your insurance policy.
Surrendering a policy involves you directly ending your policy with your insurance company. When this occurs, you will lose all the benefits under the policy.
Just like selling, surrendering your insurance policy may also enable you to receive a sum of money. This is called the cash surrender value. Though, this entitlement is dependent on your policy type.
Here are some pros & cons of surrendering your insurance policy:
Pros | Cons |
---|---|
Relatively simple and straightforward process, which mainly requires you to contact your insurer directly. | The policy type may not qualify you for any cash surrender value. For instance, whole life insurance comes with a cash surrender value, but not term life insurance. |
The selling & assigning of an insurance policy may let a third-party benefit from your (i.e., the insured’s) death. There is no such discomfort by surrendering your policy since all the benefits under the policy cease to exist. | The value of cash surrender (if any) cannot be as high as the cash-back value of third-party sells that purchase insurance policies. |
Suppose you wish to buy back the insurance policy again in the future. In that case, the insurance company may not offer you a similar level of protection or returns for the same policy type. |
What Would Happen If I Had Included My Insurance Policy in My Will?
If you previously included in your will to give your insurance proceeds after your death and insurance policy (which you had sold or surrendered), this donation will be invalid.
The reason is that the insurance policy is terminated, and it does not exist as described (whether by surrender or sale). Nevertheless, you could, for example, include an alternative clause from the on-set when planning your will to cater to such a situation.
To guarantee that you have provided for the possible circumstances that may arise concerning your insurance policies, consider getting professional legal advice from one of our will’s lawyers to assist you in your will-making.
Consider selling this to Endowment Exchange if you have a policy of endowment you have chosen to sell. Endowment Exchange purchases over existing endowment policies at prices higher than their surrender value, giving you more extra cash than if you were to surrender your approach to your insurer.

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About FR Capital
FR Capital is a Singapore consultancy firm that helps SMEs to secure business loans from banks and financial institutions. We concentrate on SME finance, and through our expertise and network, we help clients secure funding with low-interest rates efficiently and hassle-free.