Life Insurance Policy Exchange has added a partial selldown option for policyholders, which allows them to access some money, while retaining a portion of their whole of life and endowment life insurance policies for the future.
It is one of four options now offered by the exchange, including redeeming the full cash value, regular cash flow via lump sums, selling some and keeping some, and retirement planning strategies.
Founder and managing director Greg Donnison said he was seeing more policyholders wanting to supplement retirement income.
"We're providing more options, plus flexibility. People can cash out entirely to get funds now, or they might sell down just a portion of their policy with the cash value of the remaining portion continuing to grow, to access in the future."
He said it used to be that people wanted to cash out the policies to pay off debt.
But as the ageing subset who owned these types of policies went through life, their needs changed and more wanted to access the funds to help bolster their retirement income.
He said taking some and leaving some would provide a better return on the retained portion of funds than the client would be able to get by taking the whole lot out and putting it in a term deposit, at current interest rates.
"For those who are asset rich but cash poor, accessing cash through asset decumulation can be a welcome source of funds. The new Policy Exchange options provide an alternative to reverse mortgages or annuity-style products."
He said the bulk of his business came from advisers.
The partial selldown option involved more complexity and clients would be best served to have an adviser to help them manage it.
"They can sit in front of the clients and say 'this is how it works, these are the benefits'. It's not as vanilla as taking all the money out and putting it in a term deposit."
He said AMP's exit from the market would have little impact.
The platform would continue to offer cash out options for qualifying AMP policies, now and subsequent to the sale to Resolution Life. “We’ve been in dialogue with Resolution regarding the sale and been assured that Resolution will continue to manage the book with the best interests of policyholders in mind."
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