Shinhan Life Secures Six-Month Exclusive Use Right for "Designated Exchange Rate Annuity Payment Rider"

Exclusive Use Right Granted for Shinhan Life’s “Designated Exchange Rate Annuity Payment Rider”
Minimizing Exchange Rate Risks for Dollar-Denominated Annuity Insurance
Innovative Solution Supports Customized Retirement Planning

Shinhan Life announced on August 21 that its “Designated Exchange Rate Annuity Payment Rider,” developed to reduce exchange rate fluctuation risks in foreign currency insurance, has received a six-month exclusive use right from the Korea Life Insurance Association’s New Product Review Committee.

This rider allows customers of foreign currency (dollar) annuity products to set a designated exchange rate as a reference point before receiving their annuity. At the time of annuity payment, the system automatically determines whether the annuity will be paid or deferred based on the prevailing exchange rate. This feature helps to minimize risks associated with exchange rate fluctuations.

If the exchange rate on the annuity payment date is equal to or higher than the designated rate, the annuity is paid in Korean won based on the payment date’s exchange rate. If it is below the designated rate, the payment is deferred in dollars instead of being paid out. When the exchange rate reaches the designated rate on a future annuity payment date, the annuity is paid in Korean won along with interest accrued during the deferral period. Customers may also choose to receive the deferred annuity and interest in dollars during the deferral period if they wish.

The product is designed so that customers can freely change the designated exchange rate up to one day before receiving the annuity, supporting customized annuity strategies tailored to individual needs. This introduces an innovative approach in which annuity payments are determined based on customer-set criteria, moving away from the conventional uniform method.

Starting from September 1, Shinhan Life plans to include this rider in its “Non-Participating Shinhan SOL Mate Dollar Annuity Insurance,” offering a dollar-denominated annuity product that can proactively respond to exchange rate risks. The company expects that this will provide long-term retirement planning solutions for both customers seeking stable post-retirement living expenses and those sensitive to exchange rate changes.

A Shinhan Life representative stated, “We have focused on delivering the core value of dollar-denominated annuities, which is to ensure stable retirement income and diversify asset exchange rate risks,” adding, “We hope that the Designated Exchange Rate Annuity Payment Rider will provide practical support for customers’ retirement asset planning in response to financial market conditions and exchange rate fluctuations.”