Life
insurance is often viewed purely as a means of financial protection for loved
ones. However, it also presents unique opportunities for traders looking to
unlock additional capital. In the UK, using life insurance as a financial tool
can provide traders with a flexible and secure way to boost their trading
funds. This article delves into the mechanics of leveraging life insurance
policies for trading capital, offering strategies, benefits, and considerations
specific to the UK market.

Understanding Life Insurance

Types of Life Insurance Policies

In the
UK, there are several types of life insurance policies, each with unique
features and benefits:

• Term Life Insurance: Provides coverage for a specified term. If the policyholder dies
  during this period, the beneficiaries receive a payout. There is no cash
  value component.
• Whole Life Insurance: Offers lifetime coverage and includes a savings component that
  builds cash value over time.
• Universal Life Insurance: Similar to whole life but with more flexibility in premium
  payments and death benefits. It also accumulates cash value.

Key Features and Benefits

Each
type of life insurance has distinct advantages:

• Term Life Insurance: Lower premiums, straightforward coverage.
• Whole Life Insurance: Guaranteed death benefit, cash value accumulation, potential
  dividends.
• Universal Life Insurance: Flexibility in adjusting premiums and death benefits, cash value
  growth tied to market performance.

Leveraging Life Insurance for Capital

Explanation of Borrowing Against Life
Insurance

In the
UK, policyholders with whole or universal life insurance can borrow against the
cash value of their policies. This process involves taking a loan from the
insurance provider, using the policy’s cash value as collateral. The loan
amount can typically be up to 90% of the cash value.

How the Cash Value Can Be Accessed

The cash
value in a life insurance policy grows tax-deferred. Policyholders can access
these funds through policy loans or withdrawals. Loans are often preferred
because they do not trigger a taxable event as long as the policy remains
active.

Advantages of Using Life Insurance as
Collateral for Loans

• No Credit Checks: Borrowing against life insurance does not require a credit check.
• Low-Interest Rates: Policy loans often have lower interest rates compared to other
  forms of borrowing.
• Flexible Repayment: Repayment schedules can be flexible, and interest can be added to
  the loan balance rather than requiring immediate payments.

Strategies for Traders

Short-Term Trading Strategies

Using
life insurance loans for short-term trades can provide quick capital without
the need for extensive credit applications. Traders can seize market
opportunities promptly, leveraging the borrowed funds for potential quick
gains.

Long-Term Investment Strategies

For
long-term investments, the steady growth of the cash value in a life insurance
policy can provide a reliable source of capital. Traders can use these funds to
invest in diversified portfolios, balancing risk and reward.

Risk Management and Diversification

Life
insurance capital can be part of a broader risk management strategy. By
diversifying the sources of their trading capital, traders can mitigate risks
associated with market volatility.

Tax Implications and Considerations

Tax Benefits

In the
UK, the growth of the cash value in life insurance policies is tax-deferred.
Policy loans do not create a taxable event, making them a tax-efficient way to
access funds.

Potential Tax Liabilities

If the
policy lapses or is surrendered, any outstanding loan amounts may be considered
taxable income. It’s crucial to manage the policy carefully to avoid unintended
tax consequences.

Regulatory Considerations and
Compliance

Traders
must comply with UK regulations regarding life insurance policies and financial
transactions. Consulting with a financial advisor can ensure adherence to these
regulations.

Risks and Challenges

Potential Downsides

Borrowing
against life insurance is not without risks. The loan balance accrues interest,
and excessive borrowing can deplete the policy’s cash value, risking policy
lapse.

Risk of Policy Lapse

If the
policy lapses due to unpaid loans or insufficient cash value, the policyholder
could face significant financial and tax consequences.

Strategies to Mitigate Risks

To
mitigate risks, traders should:

• Regularly monitor the policy’s cash value.
• Make timely interest payments.
• Avoid borrowing more than necessary.

Expert Opinions and Insights

Interviews with Financial Advisors and
Insurance Experts

Financial
advisors in the UK emphasize the importance of understanding the terms and
conditions of life insurance loans. They recommend consulting with
professionals to ensure informed decisions.

Insights from Successful Traders

Traders
who have successfully used life insurance loans often highlight the benefits of
careful planning and risk management. Their insights can guide others
considering this strategy.

Professional Advice on Best Practices
and Common Pitfalls

Experts
advise:

• Maintaining a conservative borrowing approach.
• Regularly reviewing policy statements.
• Seeking professional guidance for complex financial decisions.

Conclusion

Using
life insurance as capital provides UK traders with a unique and flexible
funding source. By understanding the mechanics, benefits, and risks, traders
can strategically leverage their life insurance policies to enhance their
trading activities. With careful planning and professional advice, life
insurance can be a powerful tool in a trader’s financial arsenal. It’s also
important to consider your age when evaluating your life insurance needs.

For
those looking into life insurance over 60, the approach may
differ slightly. While premiums are generally higher for older individuals,
it’s still possible to find affordable options by carefully assessing your
coverage needs and shopping around for the best deals.

Additional Resources

• Contact information for financial
  advisors specializing in this area.
• Tools and calculators for assessing the value of
  life insurance policies.

This article was written by FL Contributors at www.forexlive.com.

Based on the earnings results of companies reporting on 25 July (AMC), here’s a summary focusing on the moves made by these companies and their possible impact on the overall market indices such as SPX and NDX. The list is ordered by market cap to highlight the biggest movers and provide an average weighted move. Emphasis is placed on the most popular companies and brands likely to influence market sentiment. Companies with moves less than 2 percent are disregarded unless they are popular brands or stocks.

Highlights of most popular companies

• Norfolk Southern (NSC)
  • Move: +6.8%
  • Market Cap: $50.4B
  • Impact: Norfolk Southern’s substantial positive move adds to the bullish outlook. 😃

Other notable movers

• Baker Hughes Company (BKR)

  • Move: -36.8%
  • Market Cap: $42.9B
  • Impact: Baker Hughes‘ significant negative move suggests strong bearish sentiment. 😟

• Deckers Outdoor (DECK)

  • Move: +10.5%
  • Market Cap: $21.4B
  • Impact: A significant positive move from Deckers Outdoor indicates a bullish sentiment. 😊

• Hartford Financial Services Group (HIG)

  • Move: +1.9%
  • Market Cap: $35.5B
  • Impact: A positive move from Hartford Financial is a bullish indicator, though below 2%, it’s included due to its popularity. 😊

Overall market cap weighted trend

1. Positive influence:

   • Norfolk Southern (+6.8%): With a market cap of $50.4B, Norfolk Southern’s positive move will have a considerable bullish influence.
   • Deckers Outdoor (+10.5%): A substantial move from Deckers Outdoor, with its $21.4B market cap, significantly boosts bullish sentiment.

2. Negative influence:

   • Baker Hughes (-36.8%): The sharp decline from Baker Hughes, with its $42.9B market cap, is a significant bearish influence.

3. Overall sentiment:

   • The combined effect of these movements, weighted by their market caps, suggests a mixed outlook with a slight bullish bias. The substantial positive impacts from Norfolk Southern and Deckers Outdoor are likely to outweigh the negative impact from Baker Hughes.

Expected directional bias for 26 July

• Slightly bullish to mixed/failry tight trading range day: Given the positive impact from high market cap companies like Norfolk Southern and Deckers Outdoor, the overall market indices (SPX and NDX) are expected to trend slightly bullish on 26 July. The influence of these household names is likely to sway retail investor sentiment towards a more optimistic outlook. 📈

Investors and traders should prepare for a potentially mixed market with a slight bullish bias, adjusting their strategies accordingly based on the performance of these influential companies and the overall market sentiment derived from these earnings reports.

This article was written by Itai Levitan at www.forexlive.com.

Headlines:

• USD/JPY fall draws in the next key support level
• USD/JPY Technical Analysis – 152.00 is the mother of all levels
• Backs against the wall for stocks in July trading
• Germany July Ifo business climate index 87.0 vs 88.9 expected
• Eurozone June M3 money supply 2.2% vs. 1.8% y/y expected
• France July business confidence 94 vs 99 prior
• UK July CBI trends total orders -32 vs -18 prior
• Japan government maintains economic assessment for the month of July
• Chinese yuan strengthens sharply as Beijing pushes back for now

Markets:

• JPY leads, AUD lags on the day
• European equities lower; S&P 500 futures down 0.2%
• US 10-year yields down 6.1 bps to 4.225%
• Gold down 1.1% to $2,370.38
• WTI crude down 1.5% to $75.45
• Bitcoin down 2.9% to $64,104

The risk retreat continues and the main beneficiaries continue to be the Japanese yen and Swiss franc this week. The dollar while falling against the two, remains mostly steadier across the board elsewhere.

USD/JPY was seen around 152.90 in the handover from Asia to Europe but then quickly fell to a low of 151.93 to start the session. The pair is still down 0.9% at around 152.50 currently, eyeing the next key support level from the 200-day moving average at 151.56 next.

USD/CHF also steadily moved lower in a push from 0.8830 to 0.8780 currently. Elsewhere, GBP/USD is down 0.3% to 1.2870 levels while commodity currencies stay pressured amid the more defensive risk sentiment. AUD/USD is down 0.9% to 0.6520 while NZD/USD is down 0.5% to test the 0.5900 mark.

In other markets, equities continue to come under pressure with European indices sinking across the board. The CAC 40 index is down 2% in a fall to its lowest since January while the DAX is also marked down by 1.2% on the day.

Meanwhile, US futures are also struggling after having held steadier in the earlier stages today. S&P 500 futures are down 0.2% with tech shares starting to lag once more ahead of the Wall Street open.

Bonds were more bid though as yields fell, marking a more defensive risk setup in general. 10-year yields in the US are down 6 bps to 4.225% currently.

And in the commodities space, the correction in metals is continuing with silver down nearly 5% to $27.58. The precious metal has now fallen back below its 100-day moving average for the first time since March, dropping to its lowest levels since early May. Besides that, gold is also down over 1% to a two-week low, cracking back below $2,400.

This article was written by Justin Low at www.forexlive.com.

The firm argues that the dollar rally during the period of 2021 to 2022 means that there is still scope for a deeper correction to the downside momentum in the greenback moving forward. They don’t expect the dollar to retest the lows seen towards the end of 2020 but says that the currency should move lower as we look towards next year.

They anticipate USD/JPY as being the biggest loser after having been one of the biggest movers amid rising US yields in the last few years.

Societe Generale sees the pair falling back to 140.00 in early 2025. Besides that, they are of the view that EUR/USD could retest its 2022 highs in a push to 1.1400 by Q2 2025.

A word of warning is that one should always take these forecasts with a pinch of salt. They tend to be revised a lot based on more recent market developments. For example, Societe Generale made a forecast back in January here that USD/JPY would fall back under 140.00 in Q2 this year and were targeting the 135.00 mark by year-end. Look at how things turned out instead.

And looking at how things have played out in the last two years, a key lesson is that one should never underestimate the dollar. Sure, it isn’t posting gains in a swashbuckling mood. But when you consider that many in the market were calling for its demise in 2023 and also in 2024, the dollar’s resilience has been rather commendable.

This article was written by Justin Low at www.forexlive.com.

• Prior -18

The manufacturing order book balance worsened again in July but the good news at least is that the expectations balance increased from 13 in June to 25 this month. The latter is the highest reading since March 2022. However, quarterly business optimism declined to -9 from +9 in April, marking the softest such reading since October last year.

This article was written by Justin Low at www.forexlive.com.

Fundamental
Overview

The USD has been rallying
steadily against the major currencies since last Wednesday on the back of
general risk-off sentiment, although it’s unclear what has triggered the move.
From the monetary policy perspective, nothing has changed as the market
continues to expect at least two rate cuts by the end of the year and sees some
chances of a back-to-back cut in November.

The data continues to
suggest that the US economy remains resilient with inflation slowly falling
back to target. Overall, this should continue to support the soft-landing
narrative and be positive for risk sentiment. The new driver could be Trump now
looking more and more like a potential winner and his policies are seen as
inflationary which could see the Fed eventually going even more slowly on rate
cuts.

The EUR, on the other hand,
has been supported against the US Dollar in the past weeks mainly because of
the risk-on sentiment, although that has changed last week. On the monetary
policy front, the ECB members continue to repeat that they will wait for the
data throughout the summer before deciding on a rate cut in September.

EURUSD Technical
Analysis – Daily Timeframe

On the daily chart, we can
see that EURUSD couldn’t extend into the 1.10 handle, and as the price fell
back below the 1.09 handle, the sellers piled in more aggressively with the 1.0812
support now being in sight.

That’s where we can expect
the buyers to step in with a defined risk below the level to position for a
rally into the 1.10 level. The sellers, on the other hand, will want to see the
price breaking lower to increase the bearish bets into the 1.0727 level next.

EURUSD Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that we have a minor downward trendline defining the current bearish momentum.
We can expect the sellers to lean on it with a defined risk above it to
position for a break below the 1.0812 support with a better risk to reward
setup. The buyers, on the other hand, will want to see the price breaking
higher to gain some control and start targeting new highs.

EURUSD Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that we have some consolidation at the 1.0850 level. This is where the
sellers will look for a rejection and a drop into new lows, while the buyers
will want to see a break above the trendline. The red lines define the average daily range for today.

Upcoming
Catalysts

Today we will get the latest US Jobless Claims figures and the US Q2 Advance
GDP. Tomorrow, we conclude the week with the Tokyo CPI and the US PCE reports.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

The barrage of easing measures this week was meant to bolster the economy and shore up confidence in domestic markets. However, it has been anything but that. In trading yesterday, the Chinese yuan had weakened to its lowest level since November against the dollar before bids came through. And that is before the sudden wave of strength today:

Needless to say, we all know who’s the one in the market or at least pulling the strings in getting domestic banks to do so.

It seems like they are drawing a line closer to the 7.28 mark, as evident by the previous pushback earlier this month.

Still, I would argue this doesn’t change the long-term directive of markets in their view towards China at the moment. Beijing is expending a decent amount of ammunition in trying to bolster the economy but markets remain unconvinced.

After having plunged last year, valuations were certainly attractive for Chinese stocks. There was a brief respite up until May this year but the selling has returned since then. And the troubling part for Beijing is that investors are failing to find much confidence that the recovery path will be a solid and smooth run.

Going back to the yuan currency itself, it doesn’t look like there’s much scope for a rebound until next year at least. That despite Beijing’s efforts to keep a floor on the currency as seen above. Even with the Fed cutting rates, the trend this year in USD/CNY has been clear. And in the bigger picture, nothing has really changed to the overall outlook since the start of the year.

The narrative continues to be that Beijing will want to smooth out the depreciation in the yuan to be a more gradual one.

This article was written by Justin Low at www.forexlive.com.

The newswire says that the date had been decided by the German cabinet. It has to be held at the latest by 26 October 2025 and no earlier than 31 August 2025. So, this is right smack in the middle of the expected period in autumn.

This will be the elections for the federal parliament, with 630 seats up for grabs in the Bundestag (as of now). For some context, the last election in 2021 resulted in a „traffic light“ coalition taking charge between the SPD, FDP, and Greens. That broke the previous „grand coalition“ between the SPD and CDU/CSU.

This article was written by Justin Low at www.forexlive.com.

• Prior +3.9%
• Market index 209.3 vs 214.1 prior
• Purchase index 134.8 vs 140.4 prior
• Refinance index 614.9 vs 613.0 prior
• 30-year mortgage rate 6.82% vs 6.87% prior

Mortgage applications fell back in the past week with a drop in purchases activity offsetting a marginal increase in refinancing activity. Overall, it still points to a more subdued sentiment in the US housing market.

This article was written by Justin Low at www.forexlive.com.

Fundamental
Overview

Crude oil has been under
sustained pressure since the beginning of July. Things got even worse as
Trump’s odds of winning soared after the failed assassination attempt. He is a
great supporter of the “drill, baby, drill” slogan and he will likely put an
end to the war in Ukraine if he gets elected.

Those should be bearish
drivers for crude oil as expectations of increased supply could give the buyers
a hard time for new cycle highs. On the macro side, we haven’t seen much change,
on the contrary, the latest US data continue to show a resilient economy with even
some pickup.

So, we now have some bearish
drivers on the supply side but bullish drivers on the demand side. Overall, it
shouldn’t give conviction for huge moves on either side and the market will
likely continue to trade in a range.

Crude Oil
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that crude oil broke through the key 80 support zone and extended the drop into the 77 level
as the sellers piled in more aggressively while the buyers folded.

We can
expect the buyers to step back in around this level with a defined risk below
it to position for a rally back into the key 80 level. The sellers, on the
other hand, will want to see the price breaking lower to increase the bearish
bets into the 72.50 level next.

Crude Oil Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that we have a strong support around the 77 level as we can also find the 61.8%
Fibonacci retracement level for confluence. We have also a minor downward trendline
defining the current bearish momentum.

If the price were to break
higher, the buyers should gain some more confidence and increase the bullish
bets into the 80 level. The sellers, on the other hand, will likely keep on
leaning on the trendline to position for a break below the 77 support.

Crude Oil Technical Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that the price is now around the trendline. This is where the sellers will
look for a rejection and a drop into new lows, while the buyers will look for a
breakout to the upside. The red lines define the average daily range for today.

Upcoming
Catalysts

Today we have the US Flash PMIs. Tomorrow, we will get the latest US Jobless
Claims figures. Finally, on Friday we conclude the week with the US PCE report.

This article was written by Giuseppe Dellamotta at www.forexlive.com.