Death Benefit Can Be Accessed While You’re Still Alive

Death Benefit Can Be Accessed While You’re Still Alive

Shinhan Life has launched a new whole life insurance policy that allows policyholders to receive part of their death benefit while they are still alive, without giving up their death coverage. The product is designed so that policyholders can access a portion of the benefit after a certain period, while the death benefit itself increases the longer the policy is maintained.

On July 10, Shinhan Life introduced the “Shinhan (Simplified Underwriting) Whole Life Insurance Perfect ONE.” This is a non-participating policy with a partial surrender value structure. After completing the premium payment period and maintaining the policy for 15 years, policyholders may convert it into a “Lifetime Benefit Plan.”

Once converted, policyholders who are still alive on each annual policy anniversary receive 10% of the insured amount every year for 10 years as lifetime living benefits. The death benefit is reduced only by the amount already paid out, making it easy to understand the remaining coverage.

For example, after receiving one annual lifetime benefit payment, the death benefit is reduced by only 10% of the insured amount. According to Shinhan Life, this simplified structure makes it easier for customers to understand how much death benefit remains, compared with traditional living benefit products where the reduction can be difficult to calculate. However, the more lifetime benefits a policyholder receives, the less money will ultimately be paid to beneficiaries after death. Therefore, customers should carefully consider whether they place greater importance on retirement income or leaving financial protection for their family.

The policy also increases death coverage over time. Beginning five years after enrollment, the death benefit increases by 10% of the insured amount each year for 10 years. In addition, long-term policyholders receive bonus increases in coverage at the 10-year, 15-year, and 25-year milestones through long-term maintenance bonuses.

The policy offers several flexible options as well. Depending on their needs, policyholders can convert the policy into an accumulation-type product or add riders for whole life conversion or long-term care benefits. Optional child coverage riders provide protection for children’s cancer diagnosis, treatment, surgery, and hospitalization.

Furthermore, if the insured is diagnosed with cancer, cerebral hemorrhage, or acute myocardial infarction, or is determined to have a disability rating of 50% or higher, premiums for both the main policy and attached riders are waived.

The policy is available to applicants aged 15 to 70 under the standard underwriting plan and 30 to 70 under the simplified underwriting plan. The premium payment period is 15 years. Because it is a partial surrender value product, surrendering the policy early may result in a refund that is lower than the total premiums paid—or no refund at all. As a result, prospective customers should consider whether they are likely to maintain the policy over the long term.

Following the Korean government’s introduction last year of a system allowing death benefits to be converted into retirement-style income during a policyholder’s lifetime, insurance companies have been expanding the role of whole life insurance to help cover retirement living expenses and long-term care costs. However, Shinhan Life’s Lifetime Benefit Plan differs structurally from the government’s program, as it is an integrated conversion feature built into the policy itself rather than a rider added to an existing whole life insurance contract.

A Shinhan Life representative explained, “This product strengthens the core protection offered by whole life insurance while expanding its usefulness by allowing policyholders to utilize their benefits as lifetime funds.”