Shinhan Life Secures 12-Month Exclusive Usage Right for "Shinhan Tontine Annuity Insurance"

Innovation in Annuity Structure for Addressing Longevity Risk Recognized

Shinhan Life announced on the 4th that its "Shinhan Tontine Annuity Insurance," launched last month as an industry first, has been granted a 12-month exclusive usage right by the Korea Life Insurance Association's New Product Review Committee.

This grant of an exclusive usage right marks the second case in the domestic life insurance industry in which a 12-month exclusive usage right has been awarded, following Shinhan Life’s first-in-the-industry acquisition of a 12-month exclusive usage right in 2022.

The tontine structure is designed so that, through a redistribution method among surviving policyholders, those who live longer receive greater annuity benefits. It has been spotlighted in advanced global markets as an alternative pension model to address population aging and longevity risk. Shinhan Tontine Annuity Insurance is an optimized product tailored to the Korean regulatory environment, based on this tontine concept and combining the payout structure in the event of death or surrender with consumer protection features.

Under this product, even if the policyholder dies before annuity payments begin, it pays out the higher of the total premiums paid or a certain percentage of the policyholder’s accumulated reserve. In the event of surrender, it also pays a surrender value, while applying a structure in which the funds generated by death or surrender are used as annuity resources for surviving policyholders after annuity commencement.

By integrating death and surrender payouts with survivor redistribution into a single annuity structure, and by structuring the annuity resources so that they are primarily utilized for long-lived policyholders, Shinhan Life has reconfigured the tontine concept to suit domestic conditions. Together with the fact that the feasibility of operating the product was sufficiently verified over approximately two years, its originality, usefulness, and the company’s efforts were recognized, leading to the grant of the exclusive usage right.

In addition, Shinhan Life has strengthened overall consumer protection conditions by operating its own product sales qualification system to ensure the fulfillment of explanation obligations during the sales process and to help customers fully understand the product.

A Shinhan Life representative said, "The acquisition of this exclusive usage right is meaningful in that it presents a new annuity insurance structure that can help mitigate retirement income risks arising from longevity in an aging society," adding, "We will continue to develop products and services that can support customers in preparing for a stable retirement."

This content was produced with the assistance of AI translation services.