Financial regulators have announced plans to implement a “life insurance annuity” program, which will allow life insurance policyholders to elect to receive their death benefits in the form of annuities during their lifetime. The intent of this program is to provide elderly individuals with a means of securing stable income after retirement. The program will be implemented by adding a rider, at no extra cost to policyholders, to existing life insurance policies that do not currently include an annuity option.
 
Eligible policyholders will be individuals 55 years old or older, who are enrolled in fixed-interest life insurance policies that meet all of the following conditions: (i) death benefits do not exceed KRW 900 million; (ii) premiums have been fully paid; (iii) the policyholder and the insured are the same person; and (iv) there is no outstanding policy loan at the time of application for annuity. Eligible policyholders can elect to receive up to 90% of their death benefits as an annuity, and will be able to choose between an “annual payment” option or a “monthly payment” option (to be formally launched at a later date).
 
The annuity program will be offered begining in October 2025, by five Korean insurers - Samsung Life, Hanwha Life, Kyobo Life, Shinhan Life, and KB Life, and will gradually be adopted by other life insurers. Insurers are also looking to later introduce other “service-type” options, where death benefits would be paid out in the form of services or other in-kind remittances to the policyholder.

[Korean Version]