As humans’ normal lifespan becoming longer, there has been higher demand for life insurance products to cover extremely old age, when life savings are likely to have run out.
Several Hong Kong insurers, including MassMutual, AIA, FWD and BOC Life, have extended their life and annuity coverage to 120 years old, up from the previous 100 years.
The record holder for oldest person in the world, Misao Okawa, died last year at the age of 117.
According to Japan’s health and welfare ministry, the average lifespan for Hong Kong women is 87.32 years, while men are expected to live at an average of 81.24 years, giving Hong Kong the longest lifespans globally for both sexes.
For women, Japan was second at 87.05 years, while Switzerland had second place for men at 81 years.
Estimates by the Hong Kong government show that by 2050, around 9.1% of the population will be over 85 years old, compared to just 2.4% this year.
“There are policyholders who are now demanding more retirement, medical and long-term care products, which are new business opportunities for insurers,” said David Alexander, Swiss Re head of property and casualty reinsurance. “But some of Hong Kong’s older people may find it hard to even get cover [and find it expensive] if they have suffered from illness diseases before.”
In Hong Kong, some insurers’ whole-life policies have a maturity date when a policyholder hits 100 years old, where policyholders get a lump sum equal to the compensation amount.
Tay Keng Puang, managing director and CEO of MassMutual Asia, said the insurer has extended its guarantee to policyholders still get payments after even after they hit the century mark.
“MassMutual’s Target Annuity Lifetime Saver, as an example, guarantees lifetime annuity income even if you live beyond 100 years old.
“In other words, the policy will not end at age 100, but will terminate upon the death of the insured,” Tay told the South China Morning Post
“People used to take out life insurance to hedge the risk of ‘dying too soon’.
“However, with longevity steadily increasing over the years, awareness of having proper retirement planning in place has significantly increased,” he added.
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