Death insurance payouts in annuities

[Anchor]

We recently reported exclusively on a plan that allows individuals to receive their death insurance payouts in advance like a pension.

Today (Mar. 11), the government announced the details.

It is expected to start as early as the third quarter of this year.

Reporter Hwang Hyun-kyu has summarized how the application and receipt of the pension will work.

[Report]

In her 60s, Ms. Lim Ji-hyun is a holder of a life insurance policy worth 100 million won.

She has been paying 150,000 won every month for 15 years.

Once the 'liquefaction of death insurance payouts' is implemented, Ms. Lim will have these options.

Out of the 100 million won death insurance payout, she can convert 70 million won into a pension and keep 30 million won as insurance money.

The 70 million won can be received as an annuity of about 200,000 won per month based on the interest rate at the time of joining.

The longer she delays the receipt, the larger the pension amount will be.

There are no income or asset requirements.

Anyone over the age of 65 who has fully paid their premiums can apply.

Up to 90% of the insurance payout can be converted into a pension, and there are no additional costs.

The duration and amount of the annuity can also be chosen.

[Lim Ji-hyun/Seoul, Seodaemun-gu: "It's a product I have a lot of affection for, so I've been diligently saving to prepare a lump sum. If it can be converted into a pension, I think I will use it very effectively towards my monthly living expenses."]

However, the policyholder and the insured must be the same person, and variable and interest-linked whole life insurances are excluded.

High-value death insurance amounts exceeding 900 million won are also excluded.

Instead of a pension, individuals can receive care services or nursing services in partnership with insurance companies.

[Lee Jeong-hwan/Professor, Hanyang University College of Economics and Finance: "Since many people are holders of whole life insurance, especially at a time when life expectancy is increasing, this could be positive."]

The death insurance payout pension products are expected to be launched by each insurance company as early as the third quarter.

This is KBS News, Hwang Hyun-kyu.