TEPs are bought by acquiring the rights to all accrued and future benefits for a capital sum, the purchaser assuming responsibility for all future premiums.
The title to a TEP is transferred by assignment, but the Life Assured remains unchanged, although the death benefits are paid to the investor. Purchasers of TEPs regard them as investments and not insurance contracts.
The actual amount at maturity will depend upon actual bonuses paid by the life office over the remainder of the term of the policy and it is important to realise that bonus rates can go down as well as up. Future bonus rates will depend on investment performance.
