APAC retirement products fail consumers seeking combined cover

Only 14% hold long-term care protection whilst 26% want more.

Most Asia-Pacific (APAC) consumers hold a form of life insurance policy or retirement plan, but McKinsey said retirement products were also failing to meet demand for combined financial and health protection. 

Around 30% of respondents said they wanted retirement products that bring health and wealth needs together, but the market remains largely divided between financial products offered by wealth managers and health cover provided by insurers, McKinsey’s Asia Retirement Customer Survey 2026 found.

Long-term care, or LTC, coverage remains limited. Only 14% of respondents said they had an LTC product, with coverage ranging from 6% to 23% across individual markets. 

At the same time, 26% said they wanted additional LTC coverage and 7% said they had needed LTC services in the previous 12 months but could not access them. 

Inflation and affordability were another major issue. About 26% of respondents who were dissatisfied with financial retirement products cited a lack of inflation protection, whilst31% said inflation-linked, or consumer price index-adjusted payouts were their most desired product feature.

Amongst consumers who reported problems with financial retirement products, 35% said payouts were too low, 33% said premiums were too expensive, and 33% said products were not flexible enough. 

For health products, 38% said premiums rose too much with age, 32% cited high out-of-pocket costs, and 31% said coverage was too limited. 

The survey also found that many consumers were aware of their retirement needs but had not acted on them. 

Around 54% of pre-retirees had only a general idea about their retirement plans, with no specific targets or written strategy. Another 67% were classed as completely unplanned, with neither a financial plan nor specific health arrangements. Only 18% had both. 

Cost was the main reason consumers gave for not buying retirement products. Amongst non-holders, 45% said they could not afford the premiums, 24% said they did not know what products were available, and 21% said products were too complex. 

Just 7% said they were excluded because of age or health conditions. 

The report also found that consumers may be underestimating how much income they will need after leaving work.

Across OECD countries, pension replacement rates are typically around 60% to 70% of pre-retirement earnings, but only 11% of pre-retirees surveyed expected to need as much as 70% of their current income. About 43% expected to manage on 30% to 50%. 

Awareness differed significantly by market. In Japan, 30% of respondents expected to need around 70% of their current income in retirement, followed by South Korea at 22% and Taiwan at 18%.

Amongst younger respondents in China, Malaysia and Thailand, only 3% to 11% expected to need that level of income. 

McKinsey said retirement providers could address the gap by offering simpler products, combining health and financial protection, using automatic or lifecycle enrolment and giving consumers clearer information about the income they are likely to need in retirement.

Almost all consumers surveyed across eight APAC markets can identify a major concern about retirement, but only 24% have a written retirement plan, leaving a 75-percentage-point gap between awareness and action.

The survey also found that 99% of respondents could name their main retirement fear, whilst84% could identify shortcomings in existing retirement products. About 68% expected to have less income than they would need in retirement, and just 14% said they had adequate health coverage. 

The research covered consumers in eight APAC markets, including Hong Kong, Japan, mainland China, Malaysia, Singapore, South Korea, Taiwan and Thailand.