Although the property market has experienced adjustments recently, Hong Kong is still a city with high property prices and high commodity prices. If you don’t work hard or increase your wealth while you are young, not everyone may be able to live a fulfilling life in old age. Retirees who own a property naturally have more choices for financial arrangements after retirement. If they want to retire in the Mainland, they can rent out the property to subsidize the living expenses in the Mainland; they can also mortgage the property through "Retirement Mortgage" and then Get a bank loan. In fact, there is another way to help retirees make their own long-term income, and that is a policy reverse mortgage.
The so-called policy reverse mortgage is operated by Hong Kong Mortgage Securities Insurance Company Limited. Applicants can apply as long as they are over 55 years old, have a Hong Kong ID card, and are not currently bankrupt. Of course, applicants must hold a life insurance policy.
Regarding the policy, the applicant needs to be a life insurance policy holder and the insured; the conditions include that the insurance does not involve investment components; the applicant has fully paid off the premium; the policy is calculated in Hong Kong dollars or US dollars; and is issued by an authorized Hong Kong insurance company Company operation; there are no restrictions on policy mortgage or beneficiary change, etc. You can apply as long as you meet the above conditions.
Optional lifetime annuity period
The advantage of a policy reverse mortgage is that you can make a living on your own, and you can still get a certain amount of income to protect your life after retirement.
As for the annuity period, it is up to the applicant to choose, and they can choose 10 years, 15 years or 20 years, or receive annuity every month for life until the policy expires.
If you want to get a lump sum, you can do this through reverse mortgage plans.
Generally speaking, applicants do not need to repay the reverse mortgage loan for their entire life. If the policy reverse mortgage plan is terminated, the lending institution will use the funds in your life insurance policy to repay the reverse mortgage loan.
If there is still money left over from the life insurance policy after the loan is repaid, the balance will be returned to the applicant or personal representative.
How much money can I get per month from a reverse mortgage policy? Only one policy can be accepted for one application. The amount of annuity you can receive is calculated by the mortgage insurance company based on the life insurance policy.
There are many factors for reference and cannot be generalized. For example, the applicant's age, personality, annuity period and life insurance compensation amount are all taken into consideration.
In short, the shorter the annuity period, the more annuity you can get in each period; the longer the annuity period, the less annuity you can get in each period.
Based on information from the Mortgage Corporation Limited, the annual interest rate is calculated as of July 31, 2023.
Assume that a 65-year-old male applicant owns a life insurance death benefit policy worth NT$2 million and chooses a five-year annuity period. Depending on whether the applicant chooses a floating-rate or fixed-rate mortgage plan, he can receive an annuity of between NT$7,800 and NT$8,900 per period.
For a 10-year term, you can get 5,000 to 5,700 yuan; for a 15-year term, you can get 3,900 to 4,400 yuan; for a 20-year term, you can get 3,500 to 3,800 yuan; for a lifetime, you can get 3,200 to 3,500 yuan.