Life annuity scheme subscription hits $4.94b out of $10b limit

Average subscription amount was at $525,000.

The market response to the government’s public annuity scheme has been largely lacklustre with a total of 9,410 registrations for a total subscription amount of $4.94b out of the $10b issue limit, according to a government statement. 

The average subscription amount clocked in at $525,000.

The government rolled out the insurance product which guarantees a stream of fixed income in order to provide the elderly demographic with an additional and reliable retirement financial planning option. Premiums can range between $50,000 and $1m. 

More than half (54%) of applicants have expressed intention to invest $500,00 and above tranche whilst around a third are intending to subscribe for the $1m tranche.

"We are satisfied with the overall outcome of the launch of the Plan. The promotional campaign this time has encouraged widespread discussion in the community related to life annuities and other retirement financial planning products,” Edmond Lau, executive director and CEO of HKMCA, said in a statement.

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However, he observed that the public needs more time to fully understand the features and benefits of life annuity as it’s still a a new long-term insurance product in the market.

“The HKMCA will continue to implement and strengthen the promotional work, in order to increase the public understanding about life annuities, and to lay a good foundation to the development of the local annuities market," he added.

The Hong Kong Monetary Authority will provide the necessary capital requirements and will invest and manage the premium received by the HKMCA.