Prudential Life Insurance Korea on Wednesday unveiled a new annuity product targeting people preparing for retirement, digging deeper into a market that is poised to take off as the country’s population ages rapidly.
“Life expectancy has greatly increased, but our retirement age hasn’t changed much. To the contrary, we see many cases where people are being forced out of their jobs at an even earlier age,” CEO Kurtis Jang said in a press conference. “It’s time to think seriously about retirement planning.”
The company’s new product, called the Lifetime Predefined Income Variable Annuity, is the first of its kind in Korea, he claimed, as it guarantees pension-like, predefined income for policyholders for as long as they live.
Dylan Tyson, executive vice president and chief strategy officer, pointed out that many Koreans are not fully aware of the importance of retirement planning, but worry about their life once they stop having an income.
For those Koreans, he introduced the concept of “decumulation” -- unwinding one’s accumulated assets into a stream of reliable income.
“Our clear message is this. If you are in the retirement red zone (the period 10 years before and five years after retirement), you need to focus on how you will accumulate retirement assets and turn them into reliable income that will last as long as you live,” he said.
The new Prudential variable annuity has a payment ratio of between 3 percent and 4.6 percent. To purchase a policy, a lump sum payment of at least 30 million is required.
By Lee Sun-young (milaya@heraldcorp.com)