Hanwha Life launches whole life policy that lets policyholders withdraw full premiums when needed

Hanwha Life Insurance announced Wednesday the launch of a whole life insurance product that provides a death benefit when protection is needed and allows policyholders to withdraw the full amount of premiums paid — as a lump sum or in installments — when they need a large sum of money.

Marketed under the concept of "tailor-made for my life," the product was designed to reflect changing protection needs across different stages of life.

The product's structure reflects a broader social trend of delayed marriage and extended financial responsibility. According to Statistics Korea, the average age at first marriage rose from 28.4 for men and 25.4 for women in 1995 to 33.9 and 31.6, respectively, in 2024. Over the same period, the average duration of financial dependents increased from about 30 years to about 36 years, and the age at which a breadwinner's responsibilities end rose from 58.8 to 69.9.

The product is structured so that the death benefit grows gradually during a policyholder's 40s through 60s, when demand for death coverage tends to be highest. Under a 10-year premium payment plan, the death benefit increases by 15 percent annually for four years starting in the fifth policy year, then by 5 percent annually for 10 years from the ninth year, reaching a maximum of 210 percent of the initial benefit.

When a large sum is needed — for retirement funds or a child's wedding, for example — policyholders can use the "life fund withdrawal conversion" feature. After completing all premium payments and within 20 years of the policy's inception date, customers may withdraw 100 percent of total premiums paid at a time of their choosing. They can receive the full amount as a lump sum or in installments spread over two to eight years.

This differs from the "death benefit liquidity" system introduced in October last year. That system is available only to policyholders aged 55 or older, limits withdrawals to up to 90 percent of the death benefit, and requires the funds to be received as an annuity over at least two years — lump-sum payments are not permitted. The new product allows policyholders to receive the full amount of premiums paid as a lump sum even before age 55, provided all premiums have been paid.

Unlike mid-term withdrawals from conventional whole life policies, the accumulated reserve continues to grow and the remaining death benefit stays in force for life even after the full life fund has been withdrawn.

For example, a 40-year-old man who enrolls in the standard plan with a 10-year payment term at a monthly premium of 300,000 won ($224) — with a sum insured of 23.47 million won — would have a death benefit of 45.83 million won upon completing payments. If that customer applies for the life fund withdrawal conversion at age 50 and opts for a lump-sum payment, he receives 36 million won in total premiums paid at once, with the remaining death benefit of 8.25 million won guaranteed for life. Under the same conditions, choosing to receive the funds in four annual installments yields 9 million won per year, with a residual death benefit of 11.53 million won maintained for life.

The product is open to applicants up to age 65 under both the standard enrollment and simplified enrollment options — the latter designed for those with pre-existing conditions — with a choice of 10- or 12-year premium payment periods.

"This product strengthens customer choice by providing solid death coverage when protection is needed and enabling use of the life fund withdrawal conversion feature when funds are required at different stages of life," said Song Si-yeon, head of Hanwha Life's Product Development Team 2.