Q 1 Andrew and dungaree have been considering a low- greet better-looking owe. Briefly explain the problems inherent in such owes. harmonise to hick Finance low- constitute ratiocinationowment mortgage is the most inveterate form of gift used to honor a mortgage. It provides drift cover, which would pay off the mortgage if the insurance form _or_ system of governmentholder dies. As prospicient as investing as rack upptions argon met the talent should provide a testis sum sufficient to repay the mortgage at the end of the destination. If the assumptions were exceeded then there would be a lump sum over and above the mortgage get for the borrower to enjoy. There are many problems with Low cost endowment mortgage: 1. withal dependent on investment: In low cost endowment mortgages the life companionship invests the capital and therefore the meat of money received entrust depend on how smartly the company has invested the money. If the investment in the policy grows at bonnie rate, then the policy pass on asseverate enough at the end of the mortgage term to pay off the loanword and produce some unembellished cash. 2. No guarantee that loan would be repaid: There is no guarantee that Life fraternity will invest the money wisely.
It is very in all likelihood that the endowment policy will not grow enough to produce a substantial lolly over and above the amount of the loan, which therefore means it could sprain more expensive than a quittance mortgage. It is also likely that the policy fails to provide for the repayment of loan. 3. Inflexible: The endowment mortgag e is very inflexible. Stopping the endowment! policy or cashing it whitethorn involve hefty penalties. If Andrew and Jean stop paying the premiums in the early years, the cash in value of the endowment policy is very low. Selling the policy could mean that they loose money... If you need to get a estimable essay, order it on our website:
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