FWD Hong Kong (FWD) has rolled out a qualifying deferred annuity policy (Qdap).
The Journey Deferred Annuity Plan enables customers to receive monthly payments for a period of 10 years under a five-year premium payment term.
It also allows a “breakeven period” of eight years. FWD defines the total breakeven period of the policy as the “number of years after policy inception such that the total cash value of the policy is equal to the total premium paid”.
Customers can opt to receive their annuity payment as monthly cash payments or accumulate them to earn interest.
Market needs
“Hong Kong people generally look for more diversified retirement products to accumulate and boost savings, as Hong Kong is one of the cities which enjoys long life expectancy and retirement living,” said Kelvin Yu, chief actuary of FWD Hong Kong & Macau.
“According to Insurance Authority market statistics for Q3 2019, the case count of annuities has increased by close to 380% since the launch of Qdaps as compared with same period last year.
“That reflects the launch of Qdaps with tax benefits has enhanced public awareness on early retirement planning.”
Details of plan
The Journey Deferred Annuity Plan is certified by the Hong Kong Insurance Authority, which enables the insured to claim a tax deduction on premiums paid up to HK$60,000 (£5,829, $7,678, €6,921) per tax assessment year.
At the same time, the plan provides a death benefit for clients for extra protection, in addition to annuity payments.
It accepts applicants aged 19 to 61. If the customer joins the plan prior to age 46, they can begin receiving monthly annuity payments for a period of 10 years beginning at age 51.
Those joining the plan at, or after, age 46 can begin receiving payments at the end of the 5-year premium payment term.
No medical exam is required if the policy’s total annualised premium figure does not exceed the aggregate per insured limit of $875,000 (£664,000, €789,000).
