The traded endowment policy market went through a series of reforms about 12 years ago and has become more extensively used. Policy Portfolio was the first to act in the UK buy purchasing policies. They did not act as a broker but their move had major consequences. The general public gained access to The traded endowment policy Market and as the volumes went up there was no longer any need to directly look for buyers and sellers. Since 1988 the market itself has grown due to investors' interest in buying a range of policies to match their varied financial needs. The potential of traded endowment policies is now seen by an ever increasing number of investors and advisers both in the UK and overseas.

You can increase your ROI by using the difference between loan interest rate and potentially higher traded endowment policy growth rate. This will work very well in relation to purchased Traded Endowment Policies due to the way they are priced. Most TEPs are valued based on the bonus rates remaining the same until maturity, the returns are expected ranging from 9 % to 13.5 % per year. Due to current low interest rates on loans borrowing on traded endowment policies is a sound investment strategy.

For example, an initial investment of £40,000 in traded endowment policies could be increased by borrowing £55,000 making it the total investment to £95,000. This means a larger portfolio can be purchased, and the money borrowed is still offset by the growth of the TEPs. The investor benefits not only from his own capital but from the borrowed capital.

Initially the traded endowment policy market was only worth around £5 million per year. The volumes however have increased to around £400 million in 1999 and the potential of a £1 billion market. Anyone wanting to surrender their policy before maturity can sell to any of the number of brokers. In the UK and overseas many investors invest in TEPs due to the high security compared to the return on investment. Advisors have found new uses for TEPs, and a diverse variety of investment vehicles have been devised for traded endowment policies. Although the policy holders are rarely encouraged to sell there are circumstances when they have to, such as: emigration, divorce, loss of employment. The policy holder can expect to sell the policy for around 15 % to 20 % above the surrender value and quite often even more.