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| Housing bank to launch life-long reverse mortgage annuity | |||
| The National Housing Bank (NHB), which focuses on housing finance, has drawn up a scheme in collaboration with Star Union Dai-chi Life Insurance (SUD Insurance) to provide a lifelong reverse mortgage annuity, reports the Financial Chronicle. Under the scheme, subscribers can get regular monthly payments till death, instead of the current 20-year cap on payments from the time of entering into the arrangement with the lender. NHB chairman and managing director, S Sridhar, says that IRDA has already given its approval to the new reverse-mortgage product. "Banks will now have to come up with their product either with an arrangement with SUD Insurance or with any other insurance company that comes up with a similar product after getting the necessary regulatory approval," he said. He says that annuity payments under the new scheme would be higher than those in previous arrangements. The higher payout is made possible because insurers go by mortality charts to determine the annuity whereas the banks (which are involved in the earlier scheme) arrive at the payout through discounting the property value at specified rate. "The customer will continue to deal only with the bank with which the deal has been entered with. However, there will be a back-to-back arran¬gement between the bank and the insurer under which the bank will pay the premium to the insurance company," Mr Sridhar said. |
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| Ins Communications Pte Ltd · 69 Amoy Street, Singapore 069 888 Tel: (65) 6224 5583 · Fax: (65) 6224 1091 http://www.asiainsurancereview.com/pages/e-weekly.asp?country=3 Published: 11/30/2009 12:47:37 PM © 2009 All rights reserved |
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