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Hong Kong: Mortgage corporation expands pension product offerings

Source: Asia Insurance Review | Jun 2019

The government owned Hong Kong Mortgage Corporation (HKMC) has launched its Policy Reverse Mortgage Programme (PRMP) as a new product to its range of retirement financing solutions.
Mr Raymond Li, executive director and CEO of the HKMC, said that the PRMP is another tool available in the market which can provide retirees with immediate, stable and lifelong stream of income. Its introduction follows that of the Reverse Mortgage Programme (RMP) and the HKMC Annuity Plan, which have collectively helped over 10,000 Hong Kong citizens turn their assets amounting to more than HK$20bn ($2.6bn) into stable stream of income.
The PRMP enables borrowers to use their life insurance policy as collateral to draw down loans.
Borrowers can opt to receive monthly payouts either over a fixed period of time or throughout their lifetime. They may also borrow lump-sum payouts for specific purposes. In general, the borrowers do not need to repay the loans during their lifetime. After they have passed away, the lenders will use the amount recovered from the death benefits of the life insurance policy to repay the loans.
“The payout calculation of this product is based on its death benefits instead of its cash value. In other words, the PRMP can meet people’s retirement needs by converting assets, which supposed to be granted after death, into instant cash flows,” Mr Li said. A 
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