fidentiaX: World's 1st Marketplace for Tradable Insurance Policies
Imagine a situation wherein you no longer need your life insurance policy that you bought some time ago. The reasons could be many but the solutions currently are limited and sub-optimal. Today, one could either surrender the policy for an amount which is in the range of 0-50 percent of the total premiums paid or take a loan against the surrender value at an interest rate higher than prevailing rates in the market. Clearly, neither options provide a satisfactory solution to a well-informed policyholder. fidentiaX is all set to disrupt the status quo by offering a fair value of your life insurance policies, which in all cases are higher than the surrender value offered by the insurer. Let’s understand how!
Tradable insurance policies are contracts which have cash surrender value. This includes (but not restricted to), Endowment Policies; both participating and non-participating, Whole Life, Universal Life, and Investment Linked insurance policies. Essentially, any contract that offers maturity benefit at the end of the policy term can be traded.
Life insurance policies worth approximately USD 5bn are surrendered each year in Singapore, Hong Kong, and Malaysia alone. If we include Japan and South Korea this could be a USD 725bn market. Unquestionably, the market is huge and awareness is little. Those very few who are aware that life insurance policies are tradable assets get put off by the complexities involved in trading.
Suppose an individual bought a 20-year participating endowment contract 10 years ago. The annual premium for the contract is $10,000 and the sum assured is $200,000. The product also offers a non-guaranteed bonus at the end of term which is expected to be between $15,000 to $100,000.
We match the willing buyers and sellers so they can extract the highest possible value from the policy without the middleman doing the markup
If an individual wishes to discontinue the policy, instead of surrendering it to the insurer for an amount significantly lesser than the total premiums, the individual can sell it on the fidentiaX marketplace. fidentiaX will provide a recommended selling price based on actuarial calculations. “We match the willing buyers and sellers so they can extract the highest possible value from the policy without the middleman doing the markup,” describes Alvin Ang, the Co-Founder and CEO of fidentiaX. The company enables users to securely buy, sell or store their insurance policies on the blockchain without incurring any cost to travel or transact over a long distance, lawyer fee to write out a sales and purchase agreement, and intermediary broker fee.
fidentiaX plans to steer the industry towards full automation alongside accentuating their returns and expanding their geographical reach to different countries namely, Malaysia, HongKong, Japan, and Korea, this year. With support from partners, family offices, and private equity funds, fidentiaX is endeavoring to increase the liquidity of the market. “Developing progressive strategies, we aim to address the regulatory requirements for anti-money laundering, KYC, and counter-terrorist controls within the platform, with different countries having different regulations,” states Alvin, highlighting the clear path to progress fidentiaX has paved for itself.