From Age 55, Receive Life Insurance Benefits Like a Pension: New Policy Launching in October

From Age 55, Receive Life Insurance Benefits Like a Pension: New Policy Launching in October

💡 Key Message: The new Life Insurance Benefit Monetization system starts in October 2025, allowing policyholders to access benefits from age 55 as a retirement income supplement.

Life insurance benefits, traditionally available only after death, will soon be converted into a pension-style income starting at age 55. This initiative, jointly promoted by Korea’s top 5 life insurers (Samsung, Hanwha, Kyobo, Shinhan, KB) and the government, is designed to address retirement income gaps and ensure financial stability for retirees.

📌 Key Features of Life Insurance Benefit Monetization

  • Start Date: October 2025
  • Eligibility Age: Expanded from 65 → 55 years
  • Target Group: Whole life insurance contracts without prior pension-conversion riders
  • Payout Options: Annual lump-sum (12 months at once) → Monthly installments available from early 2026
  • Monetization Limit: Up to 90% of benefits, freely chosen by the policyholder

💰 Example Payout Simulation

This new system allows flexibility in choosing the duration, percentage, and timing of payouts.

Example) A policyholder who paid KRW 8.7 million annually for 20 years from age 30, with a KRW 100 million death benefit:

👉 Leaves KRW 30 million as death benefit, and starts early withdrawal at 55 → receives about KRW 140,000 monthly 👉 If deferred until age 75, monthly payout increases to KRW 220,000

In practice, this means retirees can bridge the income gap between early retirement (55) and pension eligibility (65).

🛡️ Consumer Protection Measures

The financial authorities have placed strong emphasis on consumer protection during the initial rollout.

  • Individual notification via SMS or KakaoTalk to eligible contract holders
  • Face-to-face application required to prevent mis-selling
  • Dedicated customer support officers at each insurer
  • Withdrawal and cancellation rights guaranteed

🌟 Expected Impact

Expanding eligibility from 65 to 55 increases the number of contracts by 22 times and total insured amounts by 3 times. This provides retirees with a more flexible financial strategy and strengthens retirement income security.

According to the Financial Services Commission (FSC), the system is designed to improve quality of life for Korea’s aging population.

❓ Frequently Asked Questions (FAQ)

1. Who is eligible for monetization?

Currently, whole life policyholders without prior pension riders are eligible. New contracts will include options moving forward.

2. From what age can benefits be withdrawn?

Starting in October 2025, monetization is available from age 55.

3. What payout options are available?

Annual lump-sum: 12 months at once (available October 2025). Monthly payout: Begins gradually in early 2026.

4. Is the payout taxable?

No, benefits received through monetization are tax-exempt.

5. Can I cancel after applying?

Yes. Cancellation and withdrawal rights are guaranteed to protect consumers.

🔑 Conclusion

“Life insurance is no longer just for after death—it can now provide living income.” This groundbreaking system will serve as both a financial safety net and a retirement income strategy, ensuring stability for millions of policyholders facing income gaps after early retirement.

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