INSURANCE firm Tokio Marine has introduced a plan that guarantees lifetime retirement income.
The move is due to the increasing life expectancy of Singaporeans, it said yesterday.
The TM Retirement Life product ensures a guaranteed cash benefit from a selected payout age, payable yearly for as long as the person is alive. It also offers a joint-life basis option, which provides guaranteed cash benefits to the last surviving spouse until death.
Mr Lance Tay, chief executive of Tokio Marine Life Insurance Singapore (TMLS), said yesterday that Singapore is facing an ageing population. With higher standards of living and better health care, many are also enjoying longer life expectancy.
This means some life insurance plans promising payouts of between 10 and 20 years from the stipulated payout age may not be sufficient to ensure extended retirement financial security.
TMLS also noted in a statement yesterday the absolute amount required to meet financial protection needs would be 10 times the individual’s annual pay, according to a Life Insurance Association report released last month.
However, the average amount working adults have, to meet their financial protection needs, is only about five times their annual salary. This signifies low insurance coverage and could be due to inadequate financial literacy here, said TMLS financial adviser Michelle Teo. The firm said this shows the need to encourage younger consumers to plan ahead, as Singapore has one of the highest life expectancies in the world.
About half of all Singaporeans aged 65 today are expected to live past 85 and a third are expected to live beyond 90.