The Hong Kong Mortgage Corp’s annuity plan started to accept subscriptions from permanent residents aged 65 years or above yesterday – but only a few applicants were seen at banks.

No queues were seen in one of the designated branches in Mong Kok. Only six elderly people had submitted applications yesterday morning, RTHK reported.

The firm said the response to the scheme will be assessed after the registration period, as it is too early to say whether the scheme has drawn a good response only through the number of applicants seen at a single branch.

For a single premium of a maximum HK$1 million, the guaranteed monthly annuity payment for a 65-year-old man would be HK$5,800. It’s HK$5,300 for women, who generally have a longer lifespan.

The annuity plan can be surrendered within the guaranteed period but may incur a loss. There is no death benefit after the guaranteed period.

One of the applicants at the Mong Kok branch of HSBC said he intended to invest HK$1 million to diversify his investment portfolio. But he added the monthly payment of HK$5,800 is not sufficient for general expenses.

Financial Secretary Paul Chan Mo-Po has said the plan allows seniors to transfer part of their savings to a determined periodic income that is reliable.

Financial consultants said the scheme will lower the liquidity assets of the elderly, and they should be aware of potential losses with early surrender.

Like other annuity products offered by private insurance companies, applicants should note that it is a long-term investment plan and early surrender may bring financial losses, said an actuary of 10Life insurance company, Lun Hoi-yan.

The registration period for the annuity plan is open until August 8. Applicants can obtain or submit the subscription forms at 700 designated branches of 20 banks, or register online.

Applicants are not required to pay a premium at this stage but will need to fill in the subscription intention form with basic personal information.

They have to submit the subscription amount and name three agent banks to assist in completing the procedures.

Source: The Standard
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