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Development of Aging Product and Service

Taiwan became an ageing society in 1993, an aged society in 2018, and will become a hyper-aged one in 2025. The main economic security issues arising from an aged society include increasing care expenses after retirement, long-term care needs for those who suffer diseases or accidents and sufficient funds for healthy living. The FSC encourages financial institutions to innovate products and services suitable for the elderly, in combination with the resources of medical and care service organizations. They may also provide capital and care services to the elderly, to enable them to have more financial alternatives for retirement life, and at the same time, to maintain the competitiveness and sustainability of financial business.

The responding measures coping with the ageing society that financial institutions have brought up include the following:

1.Elderly Care Trust: Seniors or their relatives can set aside their money (including insurance benefits,) securities or real estate into a trust account. The purposes of the trust account mainly focus on asset management and payment for care or medical expenses for elderly nursing.

2.Commercial reverse mortgage: Seniors pledge their existing real estate right to a bank, and the bank pays to the seniors a principal every month. The principle can be seen security supplementary measure aiming to stabilize the seniors’ lives.

3.Resilient Policies: Traditional life insurance contracts held by the seniors could be transformed into contracts of medical insurance, long-term care insurance, or deferred annuity insurance if the counterparty is the same life insurance company, and the policyholder retains the right to restore the original contract for a period of three years.

4.Annuity insurance: This kind of insurance can make up the deficiency of pensions. Through the purchase of an annuity insurance at a young age, a person can choose to collect annuity payment every year storing from the time of retirement or from a certain age (60 or 65 for example). Together with their original pensions, the seniors can enjoy better life quality in retirement, and transfer the longevity risk as well.

5.Long-term care insurance: This kind of insurance can cope with the long-term care needs when, due to disease or an accident, a person loses the ability to live normal daily life. During the period of protection if any events meet “the conditions for requiring long-term care” prescribed by the policy, people can receive the insurance payout at specific intervals, making up the expenses incurred by hiring a long-term carer and rehabilitation expenses, so that the bedridden person lives with dignity and family members have time and energy to work, reducing the family burden.

6.Life cycle funds: This kind of fund is designed to correspond with a person’s life stage and target date. For example, the Target Date Fund is planned in accordance with retirement schedule and the proportions of stocks and bonds are gradually adjusted year by year; while or the Target Risk Fund maintains fixed risk level, with stock and bond proportion adjustment carried out according to market fluctuations.

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  • Update: 2019-10-29