An endowment policy is a product that combines life insurance and an investment opportunity, paying out a lump sum of cash upon maturity. People typically take out an endowment policy alongside an interest-only remortgage, as a way of paying off the loan at the end of the mortgage term. However, whereas once an endowment policy with a relatively modest monthly investment could once be expected to net the policyholder a significant return, many are now finding that they have a shortfall when it comes to repaying their mortgages with the proceeds from their endowment policy. Traded Endowment Policies are simply endowment products that the original policyholder has decided to sell rather than cashing them in (or 'surrendering' them).
You may decide that your endowment policy no longer suits your financial circumstances, in which case you have two choices. Surrender the policy or sell it on the open market. If you were to cash in the policy, the maximum that you would receive back is the amount that you had originally invested, although normally it works out to be less. With a traded endowment policy, there is a chance that you will receive a higher sum for the policy so that you can combat inflation and receive (in real terms) a sum to equal your original investment. Check the surrender value of your policy with your life assurance company before making any decisions, and always seek professional financial advice before making financial decisions that will affect your savings and investments.