Korea’s financial authorities are pursuing the securitization of life insurance death benefits, a key policy initiative of the current administration. The initial launch was scheduled for October 30, 2025, with five leading insurance companies: Hanwha Life, Samsung Life, Kyobo Life, Shinhan Life and KB Life.
The recent rapid shift in demographics caused by low birth rates and an aging population, along with increased life expectancy, has increased the importance of securing retirement income. However, according to Statistics Korea, the poverty rate among the elderly stood at 38.2% as of 2023, a level significantly higher than that of other OECD nations, and retirement planning, particularly through pension schemes, remains insufficient compared to other major developed nations. To address this gap, the financial regulators are promoting the securitization of life insurance death benefits to help individuals secure their retirement through insurance. The objective of this new policy is to offer stable retirement income to a greater number of elderly individuals, by allowing them to securitize their life insurance death benefits, along with Korea’s reverse mortgage system.
The following is a comprehensive summary of the key features of the death benefit securitization program.
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Overview |
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Existing policy: A special rider can be added to existing life insurance policies that did not originally include an annuity conversion option.
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New policy: Policyholders who enroll in new products with the securitization rider can convert their benefits once they meet certain eligibility requirements, such as having completed premium payments and reaching a minimum age.
Through such benefits securitization, policyholders can receive a tax-free amount (as a pension or service) that is at least equal to the total premiums they have paid. Policyholders have the flexibility to select both the payment period and the percentage of the death benefits they wish to securitize.
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Lower Age for Eligibility (From 65 to 55) |
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Product Launch Plan: Annual Payout Option to Be First Introduced |
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Consumer Protection Measures |
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All eligible policyholders have been individually notified – via mobile SMS or KakaoTalk message – by the five participating insurers upon the program’s launch from October 23, 2025. Subsequently, all insurers offering the product will regularly identify and notify new eligible policyholders.
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To prevent mis-selling during the initial phase of the system’s operation, applications will initially be accepted only through in-person branch visits remote enrollment is to be considered once the system stabilizes.
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To ensure policyholders’ full understanding, each insurance company will have a dedicated representative to provide guidance. Additionally, policyholders will be granted rights to withdraw or cancel their securitization agreement.
After the five insurance companies’ securitization of their death benefits on October 30, 2025, other insurers are expected to introduce similar products sequentially.
For service-type products – where the benefit is provided in the form of goods or services – more time will be required for systems integration and partnership arrangements, and the related products will launch at a later stage.
In this context, the relevant industry participants should be careful to ensure compliance with the changed regulatory regime in offering such new securitization options. Similarly, policyholders who wish to apply for the securitization of their death benefits should also make a careful and well-informed decision after thoroughly reviewing the new product option.
