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Close Brothers launches with-profits endowment loan product

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Close Brothers launches with-profits endowment loan product

Close Brothers is to offer secured loans against with-profits endowment policies.

Under the terms of the loan Close Brothers will take over payment of the policy premiums and on maturity of the policy Close Brothers receives the cash and pays any surplus to the policy holder.

Currently provides Prudential and Scottish Mortgage offer loans against their own with-profits endowment policies.

John Taylor, commercial director of Close Brothers’ retail division, said 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.

Taylor said a fifth of policy holders planned to cash in early. He said there were 2.5 million endowment policyholders in the UK, with £30 billion invested in the sector.

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