An insurance product that allows policyholders to receive death benefits like a pension while alive will be launched on the 30th.
The Financial Services Commission held a meeting on the 22nd to review the securitization of death benefits and checked preparations with the five life insurers launching the death benefit securitization product (Samsung, Hanwha, Kyobo, Shinhan Life, KB Life).
The five life insurers—Samsung, Hanwha, Kyobo, Shinhan, and KB Life—will roll out the first tranche of death benefit securitization products on the 30th. The initial batch covers 414,000 contracts, with a subscribed amount of 23.1 trillion won. Consumers holding contracts eligible for death benefit securitization will be notified individually on the 23rd.
All life insurers plan to launch death benefit securitization products by Jan. 2 next year. Consumers holding contracts eligible for death benefit securitization will be notified individually one week before launch. The scope of eligible contracts is expected to expand to about 759,000 contracts and 35.4 trillion won.
Because the death benefit securitization product targets older adults 55 and over, applications are only accepted through in-person customer centers or branches. Insurers have developed a comparison guidance system for death benefit securitization to help consumers choose. Before applying for securitization, a simulation provides a comparison table of the payment amounts based on the securitization ratio and period the consumer selects.
The older the policyholder, the more they can receive, and they can choose when to start securitization and the payment period. If needed, they can pause the securitization or request early termination. They may reapply afterward.
The government said it will continue to develop and support products and systems that can help with retirement planning through insurance products, such as death benefit securitization.
The death benefit securitization program targets those who meet conditions such as having completed premium payments for at least 10 years on fixed-rate whole life insurance, using death benefits (up to 900 million won) as collateral.