Shinhan Life Insurance has introduced a pension insurance product guaranteeing a minimum annual interest rate of 7%, challenging the pension insurance market.
Called “Shinhan ONE The Life”, the product guarantees an annual interest rate of 7% for one to 20 years after signing up and then 5% thereafter.
For example, this product allows a 40-year-old male to pay KRW500,000 monthly for 10 years, and upon starting the pension at age 65, receive KRW7.27 million annually (KRW600,000 monthly) until age 100.
If the same conditions are applied with a payment of KRW1 million, the annual amount received would be KRW14.54 million (KRW1.22 million monthly). It takes approximately nine years of receiving the pension to recover the principal (paid premiums), after which revenue begins to be generated.
The product introduced by Shinhan Life is a general pension insurance. Although it is distinctly different from variable pension insurance, it can be seen as similar to existing minimum guaranteed variable pension insurance products due to its guaranteed annual interest rate of 7%.
Shinhan Life explained that they launched this product in the form of pension insurance due to restrictions that only qualified agents can sell variable pension insurance.
"We developed a new pension insurance in line with the ageing trend. It aims to enhance sales activation and diversify the product portfolio," said a Shinhan Life representative, reported Chosun Biz.