Under the terms of the loan, Close Brothers will take over payment of the policy premiums and upon maturity of the policy, the company receives the cash and pays any surplus to the policy holder.
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Currently, Close Brothers provides Prudential and Scottish Mortgage as loans against their own endowment policies.
Speaking on the move, John Taylor, commercial director of Close Brothers’ retail division, said that this loan would encourage policy holders not to surrender their policies early and benefit from the terminal bonus.
"This provides an alternative to surrendering a policy and gives another option for the IFA to talk the client through," he said.
He further added that a fifth of policy holders planned to cash in early and added that there were 2.5 million endowment policyholders in the UK, with GBP30 billion invested in the sector.
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