Kathmandu. South Korea’s Financial Services Commission (FSC) has allowed life insurance policyholders to use a portion of their death benefit as retirement income with effect from October 30.
Five life insurance companies (Samsung, Hanhua, Keyobo, Xinhan Life and KB Life) will start calling for this service to eligible customers on October 23. About 414,000 life insurance contracts (worth $16 billion) will be eligible by the end of September 2025.
By January 2, 2026, all other life insurance companies will also start providing this service. This will bring the total number of eligible contracts to 759,000 and the profit to $25 billion.
This option is available only to policyholders aged 55 and above. To get this service, the person has to apply individually to the customer service center or branch office.
Insurance companies will show simulations. In which customers can see the benefits they will get based on their choice conversion ratio and duration.
Insurers can suspend, withdraw, or rejoin the program at any time. The FSC said the initiative aims to help retirees better manage their financial needs in their old age.
The regulator also plans to test a “service type conversion” product. This will convert death benefits into senior care services. The FSC said the Tontine pension scheme would be implemented in early 2026.
