South Korea allows life policyholders to tap death benefits for retirement

The option will be available only to policyholders aged 55 and above.

South Korea’s Financial Services Commission (FSC) will allow life insurance policyholders to access part of their death benefits as retirement income starting October 30.

Five life insurers (Samsung, Hanwha, Kyobo, Shinhan Life, and KB Life) will begin contacting eligible customers from 23 October. 

As of end-September 2025, about 414,000 life insurance contracts worth $16b (KRW23.1t) are eligible.

By 2 January, 2026, all other life insurers will roll out the same service, bringing the total to 759,000 eligible contracts and $25b (KRW35.4t) in benefits.

The option will be available only to policyholders aged 55 and above, and applications must be made in person at customer service centres or branch offices.

Insurers will offer simulations showing the amount of benefits customers can receive based on their chosen conversion ratio and period.

Policyholders can suspend, withdraw, or rejoin the program at any time. The FSC said the initiative aims to help retirees better manage financial needs in old age.

The regulator also plans to test “service-type conversion” products that turn death benefits into senior care services and to introduce tontine pension plans in early 2026.