Hang Seng targets $3,300 retirement income gap

Pre-retirees said they need about $5,200 a month for a comfortable retirement.

Hang Seng improved its IncomePower Life Insurance Plan, aiming to help customers generate passive income and plan for long-term wealth and legacy needs.

The plan offers a non-guaranteed monthly income starting from the 25th policy month, with payments designed to increase over time.

For a US dollar single premium policy, the projected income rate rises from 5.16% per annum to as much as 7% per annum by policy maturity.

The launch comes as a survey cited by the bank shows a gap in retirement income among Hong Kong residents.

Pre-retirees said they would need around $5,200 (HK$40,000) per month for a comfortable retirement, but currently receive about $2,000 (HK$15,000) in passive income, leaving a shortfall of roughly $3,300 (HK$25,000).

Based on an example using a $1m (HK$7.8m) single premium, projected monthly income would start at $4,400 (HK$33,540) between policy years three and 20, rising to $4,600 (HK$35,750) in years 21 to 30, $5,100 (HK$39,000) in years 31 to 40, and $5,900 (HK$45,500) in years 41 to 50.

Customers can choose to receive the income in cash or leave it in the policy to earn interest. The plan also allows the life insured to be changed up to three times, subject to approval.

($1.00 = HK$7.83)