FSC: All Life Insurers to Launch Death Benefit Securitization Products on January 2, 2026

Following Samsung, Kyobo, Hanwha, Shinhan, and KB, 14 More Life Insurers to Launch Products
Notifications Begin December 24... Service-Type Products Also Planned

The Financial Services Commission announced on December 23 that, starting January 2 next year, all life insurance companies will launch death benefit securitization products.

Following the implementation of the system on October 30 by Samsung Life Insurance, Kyobo Life Insurance, Hanwha Life Insurance, Shinhan Life, and KB Life, the remaining 14 life insurers will also introduce these products. With the exception of BNP Paribas Cardif Life, IBK Pension Insurance, and Kyobo Lifeplanet, which do not have eligible contracts, all other life insurers will be able to offer death benefit securitization products. Starting the following day, life insurers will notify customers via text message or KakaoTalk, and the products will be available for use from February 2.

Non-face-to-face services will also be implemented. However, these will be introduced sequentially, starting with life insurers that have completed preparations for non-face-to-face enrollment. Video consultations and call centers will be operated to provide counseling and accept applications for death benefit securitization. Hanwha Life and Mirae Asset Life will begin operations on February 2, Shinhan Life on February 30, and iM Life in the first quarter of next year. Other life insurers are also reviewing their operational plans. Insurers will provide non-face-to-face applicants with a comparison table based on simulations of securitization ratios and periods, and will clearly explain key details.

The death benefit securitization system applies to both previously sold and newly issued whole life insurance policies. As the number of policyholders who reach age 55 and fully pay their premiums naturally increases, the Financial Services Commission expects the number of eligible participants for death benefit securitization to continue to grow. There are currently 600,000 eligible contracts, with a total subscription amount of 25.6 trillion won.

According to the Financial Services Commission, from the introduction of the death benefit securitization system on October 30 through December 15, a total of 1,262 applications were received. The first-year payout amounted to 5.75 billion won, with an average securitization amount per case of about 4.56 million won. On a monthly basis, this equates to about 379,000 won, which is roughly 20% of the monthly 1.92 million won deemed adequate for retirement living expenses in the National Pension Service's National Retirement Security Panel Survey. The average age of applicants was 65.3 years. The average securitization ratio chosen by policyholders was about 89.4%, and the average securitization period (pension payment period) was approximately 7.8 years.

The securitization period can be set by the policyholder in yearly increments, with a minimum of two years. There are no additional costs to customers for applying for securitization.

A Financial Services Commission official explained, "It appears that even for small insurance payouts, people are utilizing the system by increasing the securitization ratio and shortening the payment period."

The Financial Services Commission emphasized that since death benefit securitization can be applied for starting at age 55, it can be used as retirement funds to fill the income gap after retirement. It is well-suited for use during the gap between retirement and the start of National Pension payments. Temporary suspension and reapplication are possible, and the securitization ratio and period can be freely chosen, allowing for customized use according to one's financial situation.

The Financial Services Commission plans to form a task force with major insurance companies and continue to develop and implement financial products and policies for retirement preparation, such as death benefit securitization.

First, the commission plans to sequentially launch monthly pension payment products in March next year to increase the utilization of the death benefit securitization system. Currently, only annual payment type products are available, which pay out one year's worth of pension at once. After the introduction of the monthly payment service, existing annual payment customers will also be able to convert to monthly payments for the following year's pension.

The commission is also pursuing the launch of "death benefit securitization service-type" products that provide comprehensive retirement services such as healthcare and nursing care, rather than pensions. Plans are also being made to strengthen practical policies, such as "measures to activate trusts for dementia money management" and "expanding insurance products related to dementia."

An official from the Financial Services Commission cautioned, "Even if you receive individual guidance via text message or notification, please note that you will not be eligible to apply if, after receiving the guidance, you take out a policy loan or otherwise fail to meet the application requirements."